Why Borders' Closing Down Sale Isn't That Exciting

Borders is closing all but nine of its Australian stores. That means that the closing stores must be a bonanza of cheap books, right? Wrong.

Earlier this afternoon, I found myself at the Macquarie Shopping Centre with my five year old son and half an hour to kill. Outside the rather large and flashy Borders bookstore.

Borders sent out an email to its newsletter subscribers last night indicating that it was closing all but nine of their Australian stores. For reference, the stores that are closing are Chatswood, Hornsby, Kotara, Macarthur Square, Macquarie Centre, Parramatta, Tuggerah, Brisbane, Garden City, Camberwell, Doncaster, Geelong, Highpoint, South Yarra, South Wharf and Adelaide, and they're said to be closing "within the next eight weeks".

The email I'd read said that 20-40% off sales would be commencing on a store by store basis immediately, and the Macquarie Centre store was on that shortlist of soon to be dead stores. As such, I was prepared to do some serious shopping — of a sort.

For absolute mass-market paperbacks Borders has never been that compelling a buying solution, simply because the likes of Kmart tend to undercut them severely on that kind of text, but for more obscure titles, especially imports, they can sometimes have some great oddities.

I specifically went in there thinking I'd see what (if anything) they had left in the Asterix library; there's a few quite large holes in my collection, and the individual titles have of late been rather costly — typically $20-$25 for a softcover and $30-$35 for a hardcover volume. Heading to the back of the store, I scoured the shelves and found four titles I didn't have. Two hardcovers at $32.95 each, and two paperbacks at $22.95 each. With the huge 20% off signs plastered everywhere, it looked like I had quite a deal on my hands.

Until I paused, breathed in, thought about it, and pulled my phone out of my pocket. The key with this kind of sale is always to stop and think, because so many stores presume you'll be overwhelmed by all the huge percentage discount signs everywhere and just blindly buy. A mobile browser opened and a few quick taps later checked the price of the volumes I was looking at from Amazon UK, where they're still doing free shipping on orders over twenty five pounds.

Those $22.95 paperbacks? Five pounds ninety nine each, delivered. The hardcovers are an even better deal, at eight pounds ninety nine each. A quick bit of currency translation puts that at $9.30 and $13.99 respectively. That's quite a bit different to the prices I would have got, even at "bargain" rates. Heck, even if the titles are still there when Borders applies the 40% markdown to everything (which will presumably be just before the doors close forever), it's still more expensive!

And if I needed further proof, all I had to do was wander over to the DVD selection. By chance, I'd been there a fortnight before, when they'd started clearing that section. At the time, every title was being sold out at $10 each. Now, they all bore huge (and by the look of them, freshly printed in multiple colours at cost) signs proclaiming them at 40% off list price. Again, looks good, except that 40% off list price of an average DVD price of $30 is still a lot more than $10. Or in other words, under the new "sale", the prices have actually gone up.

Clearly, the administrators appointed to oversee the business are in a bind. They've got to maximise the possible return for the business, so they're in no way obliged to give things away simply to get stock off store shelves. Their problems aren't the problems of a consumer, especially for a business that won't accept returns other than on dud stock, and won't accept gift vouchers at all any more. And ultimately, it's a very good indication that, even in closing-down sales, what seems like a bargain at first glance might actually be a bad deal.


Comments

    And Australian retailers are wondering why people don't buy their goods.

      There's a lot of retailers closing down in Aus because wholesalers are stuffing up our market. FACT: It is cheaper for us to buy goods at retail from the UK and USA than to buy WHOLESALE FROM AUS. A Michelin map in the UK costs us $8.00 inc shipping at retail, or $11.97 from wholesalers excluding shipping. No wonder so many retailers are closing down. Wholesalers are stubborn bullies who want everything sold now and all their money at once, forcing retailers to try and give money back by selling overpriced goods.

    Keep watching.
    when they got close to closing the Rouse Hill store, they sold the books off for a $1 each.

    Hmmm. Your experience all rather predictable, sadly, and indicative of why Borders failed. With their "normal" prices being marked consistently above RRP (let alone online alternatives), they've needed those regular 30% off sales just to rekindle any interest. So 20%-40% is rather underwhelming. My local Angus & Robertson jumped to 50% off when they were closing, and I got some bargains - well, at least I thought they were!

    So you've pretty much shown WHY Borders is closing down - brick-and-mortar retailers simply can't compete in low-margin product like books.

    I thought by law they had to honour gift certificates, otherwise they get free money for nothing.

      I wish that was the case. I haven't got an Angus and Robertson or Borders gift card but I've been forced to make a complaint to th ACCC for one of the Prepaid visa companies because a card we received as a wedding present expired after 4 months.

      The problem with giftcards is that you purchase a value with the company say $50. When you pay that $50, the company uses it, and you get a card that entitles you to something worth that much. When such company goes downhill, they wont have that $50 anymore and their product has to be put at a reduced price to try and compensate the loss , but you still have a card that entitles you to something worth $50, so they lose a lot more money.

      Or in other words you have deflation of everything that company owns.

        There is no deflation - you get nothing.... Considering the employees still do not know if they will get any of their entitlements ( holiday pay redundancy) then suckers left holding gift cards will be the last people anyone cares about...

      The administrators are under no obligiation to honor contracts entered into with the company. It's a loophole and it sucks but it's valid. Gift card holders become unsecured creditors and can enter a line to receive credit if the company goes into receivership, but they will be in a long line behind employees and other creditors. It's a shit situation and unfortunately it's the employees who have had to bear the brunt of the angry customers, when really they're in a worse situation than the customers with $50 gift cards.

    Gee! What a surprise! Books still being a huge rip off in Australia, even when the company is having a closing down sale! Amazon and Audio books rule.

    Hey Lifehacker,

    I am positive that any "closing down sale" would attract many consumers and make that sale ideal way to get them to buy as many books as possible without even checking the pricess elsewhere in a scare to miss-out.

    Also, I can agree that some stores may have such books cheeper elsewhere.

    However, when you mentioned the books from England, you did not account for the additional charge for the books to be sent down to Aussie which would turn out to be as much as they are sold at Borders plus you would have to wait for them (whilst someone may have someones bday to buy the book for asap).

      You clearly missed the bit about free postage from Amazon UK.

      the book depository also has free delivery to australia with similar prices as Amazon, and sometimes has 10% discount codes

      http://www.bookdepository.co.uk/fccbookclub?a_aid=code

        www.borders.com.au ALSO has FREE yes FREE postage to anyone anywhere in australia, from anywhere.

    It is the local publishers who gouge the Oz market. I've recently seen Lonely Planets where the RRP price is printed the back cover with the backcode. £15.99 UK or $44.95 AUD .. says it all really.

      Yes the price may seem like a ripoff in terms of the amount you pay but you don't understand how the system works. I used to buy ebooks from www.fictionwise.com but as time went on more and more books became restricted to US only. I found a help page (http://www.fictionwise.com/help/GeographicRestrictionsFAQ.htm) that explained it.

      Like DVD's there are publishing regions and it looks like Australia is a seperate region and the publishers/printers in australia would have to enter into a contract to print and sell books in australia. I would say the contract has a fixed upfront cost, so a country having 60 million people would be able to spread the initial cost easier than a country with 20 million people.

      Dont forget to add to the price freight, bookstores still have to pay freight.

    I wouldn't be so quick to blame retailers as much as publishers. I can't speak for Borders but I was helping with an A&R closing down sale for a franchise owned by someone in my family. They don't price gauge but make such a small margin on bigs heavy discounting runs a loss.

    Publishers have bulk deals for larger chains, for example it cost more to buy the stock then a large local chain would sell the same books. Literally at times the owner would buy stock from local large chain store because it was cheaper then buying from publisher!

    Last few weeks selling books at 20% is already running a loss going down to $10 for any 3 books was losing thousands.

    Just my experience with a smaller A&R franchise I can't speak for Borders but just because you can buy books elsewhere for cheaper it doesn't mean they are making a rediculous mark up on them.

      This means that India & China with a billion+ people should have books at throwaway prices.. right?

        That doesn't even make sense. What does India and china have to do with any of this? This is business to business selling, not to individuals. And yes, it is absolutely true that large chains receive significantly deeper discounts than retail. Also, guess what? Online places like amazon don't have to pay rent for retail fronts (which, btw must be located in a expensive high traffic center w/huge rent so it can convenient for you) all over the country, and signage, and lighting, and ambience, music, carpeting, several well trained sales people to quickly answer your question etc etc etc. So yeah, it is harder for a retail establishment to compete with amazon and other online places because they have to provide you with the whole shopping experience, from light to smell to colors. And then, you go into these stores, take down your titles and order stuff online. That's just low. And lame. Learn something about retail business before going on about the ridiculous markups they make. Read a book.

    I went to a Borders closing sale on the last day and got the Director's Edition of Donnie Darko for a dollar!

    I take your point, but there's something to be said for seeing a book, holding a book and deciding to walk out of there with a book in your hand- not waiting a week or so to have it. Bookstores aren't just selling me a book- they're selling me a book right now. I pay for that experience.
    That said, I love on line purchasing because I prefer second hand books. Environmentally sound, economically sound, supporting a network of smaller businesses, and I just plain like the feel of them. You'll probably never sell me a kindle.

    "...especially for a business that won’t accept returns on dud stock..."

    With the usual disclaimer (not a lawyer), retailers are obliged under law to replace or offer a refund on an item that is not of acceptable quality, fit for purpose, or as described. It does not mater if the item was bought in a sale or closing down sale.

    On the other hand, if you consent to buy an item which has a flaw or flaws pointed out, you can not return it just because of that flaw or those flaws.

      Entirely correct; an error in the article; It was meant to say "won't accept returns on anything BUT dud stock or accept gift certificates any more". My error entirely.

    Eh, Borders do have some books that are cheaper than what you would find online. For example, the Book Depository sells 'The Short Life of Bree Tanner' for $8.48 and my sister picked hers up from Borders for $1.

    Although everywhere else I looked, a lot of the books were still overpriced... -sigh-

    It's hard to lay the blame on Borders when it's Australia's parallel importation laws that are really at fault.

    People seem so quick to point the finger at local publishers. As a local publisher myself I'd like to clarify a few points. (especially @mulgar)

    The sad fact is that publishers don't really have big bulk deals for bookstores. Considering most bookstores will only accept 2-3 copies of a title, it might be hard to broker a bulk deal on that.

    Furthermore, consider this. Bookstores will only accept titles from a known distributor. These distributors will usually take 68-70% of the profits from sales of the book. Funnily enough, I was having a chat awhile ago to the director of a major distribution company and he admitted that it was getting hard to compete with overseas sites like bookdepository.co.uk (a personal favourite as well. super cheap and shipping is free!).

    The sad fact is that it doesn't help to go pointing fingers. And i don't think the fault purely lies with the stores, distributors, publishers or authors. It's probably a case of equal blame and also the sad economic condition of the Australian literary market.

    "Clearly, the administrators appointed to oversee the business are blind." Fixed that for you.

    I've got no idea what "plan" the administrators have for this business, but clearly it isn't working. The way things are going they'll have to shut down every single store and liquidate everything in the business to return money to their creditors.

    It makes you wonder if they're only dragging this out further so they get more money themselves. At $600 and $450 a day for a Partner and Analyst respectively, there's clearly some good money to be made from drawing this process out as long as possible. Don't worry about them being added to the long line of creditors, they'll pay themselves before anyone else.

    The problems with A&R/Borders were purely managerial related. People complain about crazy prices in Australian stores, about how good value Amazon is, about parallel import restrictions, publishers gouging the industry, ect. ect. but just look around, Dymocks aren't going out of business, you local book store isn't closing down and selling all their stock for $1. The franchisees who broke their franchise agreements just recently have good businesses, so clearly it wasn't the brand that was a problem. This was just a badly run company, pure and simple.

    If you're looking for a villain in all of this, how about you look at why the Chairman of the company left the middle of last year, or why the Managing Director left 6 months before they went into administration. They saw the writing on the wall, and they knew they had to get out to avoid the fallout from this, and ensure they get their payout, unlike the rest of the staff left behind after it falls.

    Some prices may have been over the limit but to me it seemed like some books were actually cheaper and you could find Mnaga there and thats where i got my first book but buisness seems messed up. I'll miss Borders.

    I went to Borders Chatswood on the weekend and they've not only cleaned their shelves of tonnes of inventory, but they're now down to 70% discount on books.

    Bought myself five books for around fifty bucks - so I can't complain.

    Even though there is a part of me that mourns of the loss of physical bookshops in the world, it's tough to compete against online retailers.

    at first their sales were hardly sales at all, even after 40% reductions, i could still go to another bookstore, let alone the internet, and buy the same book for less. however at the very end of their sale, i picked up a number of good books for $1 & none were over $10.

    I must confess that I succumbed to the "40% discount" sale at Sth Yarra, bought a number of books, and found after I got home that the prices were comparable to (or maybe a $ or two higher than) Amazon's. Oh, well... However, and notwithstanding the generally high prices of books at Borders, it's a shame to see so many of the stores go. The first Borders store I frequented was the one in Chapel St, and it was- I think- the first to open in Aus. When first open, it had a fabulous range of music books- many not seen on the shelf elsewhere before or since, in all genres, with plenty to interest the music specialist, but they were generally highly priced. I bought many DVDs of classic European and Asian movies in their two-for-$40 sales. Sure, I might have sourced the same titles more cheaply over the internet, but they might have been coded for different regions, requiring another dvd player.
    I went into Chadstone recently, and it was dreadful. It seemed as if it had been filled with rows of those flash-in-the-pan books that are here today, remaindered tomorrow. Kind of like an over-sized A&R. The range in all areas had narrowed enormously. From my own perspective, I seldom bought books at Borders- whereas I cannot wait to get my hands on a movie dvd, I can wait for a book, and source it more cheaply from Amazon, or elsewhere. As to why they failed- I will leave that for more expert opinion. Still, I feel it is a loss. Back to Readings for me, but where they no longer take my Amex card....

    Some people will complain about anything.... I scored around $300 of books for 35 odd dollars from the Tuggerah store that has just closed its doors....

    How about we stop and think about the staff who are on the front line of this?? everyone is worried about their crappy freaking $30 gift card - who gives a shit? there is people who are not getting pays, annual leave and any entitlements who have kids, mortgages, car loans etc. I know everyone is doing it tough at the moment in this economy but I cant believe how pathetic people are being - all i hear is how they didnt get a good sale or how they didnt get their gift card. wake up. there is bigger things happening in the world than your measly bloody $30 giftcard. and FYI borders have their online shop as well to obviously try to compete with online shopping and availability, however the prices cannot be helped - under the crappy oz laws Borders (and all book stores) have to abide by means they pay oz labour, oz taxes and freight etc etc of course they cant compete with amazon etc on price, but there is nothing like buying a book in a store and i assure you many people who shop @ borders are regulars who are more than happy to pay for the SERVICE and experience of the shop and cafe. there is not a huge mark up in books at all - less than 30% so thats why Kmart etc can sell cheaper - they dont get it cheaper than borders, rather they undercut borders to get you in store, where u purchase clothing/appliances etc which have HUGE profit margins and make up the difference, and then some.

    I don't think a lot of people realise that people are losing their jobs. I agree that it is sad about gift cards, but compared to earning a living? There's no competition.

    I'm sure each and every one of you would be upset if you lost your job over something you couldn't control, and then to make it worse, customers that 'support' the store become nasty AT YOU because they're not getting what they want? It's just unnecessary. Have some compassion.

    It's so easy to point the finger, but remember, it's the executives that made the decisions that was the downfall of the company. It's the employees that have to take the brunt of the criticism. Please be mindful of others who are trying to get through a tough time without making them feel like the villain who has cheated you out of something that you are 'owed'.

    There's a lot of negativity surrounding how people have been 'cheated' out of a sale or that they're not impressed with the general prices at Australian Book sellers. But the truth is the government has made a law to stop imports from publishers overseas because they are so cheap. This was to support Australian Publishing jobs. Now the whole Australian industry is under threat because of the continual support of the overseas market.

    When you buy online it's not the same as walking into a book store. You can't smell the books, you can't flicking through them to see if they are right and you certainly can't get service.

    I'm sorry if I like to buy books in a store with electricity and employees. It just means I can have a book now, rather than waiting. If that means I have to pay a little bit extra, it means I am helping support an Australian business that could help support hundreds of people. Who now, will ultimately, have to find new jobs.

    People are now losing their jobs while others hide behind online forums and moan about how they've been wronged. That's easy. What's harder is to imagine what it would be like in their place. What would you do? I'm sure a lot of people would start to think differently.

      To Anon,
      I Thank you for your words, I am one of those whos job is threatened and I dont have a mortgage but I have to pay rent and help put food on our table and contribute to the daily running of our household, these last few months have been a nightmare, customers abusing us cos they cant use THEIR giftcards, which were given to them anyway. Abused cos we dont have the books THEY wanted, all I have heard for the last 3 months is "what about me".
      Well at 49 I find myself unemployed twice in 2 years my last employer retrenched all their casuals, and now this. So again thank you for speaking out for us, I for one appreciate it, and to any others who also choose to defend us, THANK YOU, x

      well said!! couldnt agree more with you!

      Well said Sir, your words bring us hope to move on.
      Thank you.

    Not sure what you're talking about. I picked up 12 x 40" LCD monitors for $100ea. That was pretty exciting.

    Problem now is that I'm looking for a stand now for a 40" monitor... selling on eBay for nearly $200 a piece.

    I can't believe this hasn't been mentioned!
    Australian book sellers have to buy from Australian publishers because they can't import themselves. There is actually a law 'protecting' Australian publishers from bricks and mortar stores bypassing them and ineffect supposedly protecting jobs in the Australian printing industry. This is the real reason books are so expensive here.... I think this is really the main issue!

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