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Quite the World, Isn't It?

Borders' bankruptcy, and the tsunami effect

A friend owns a children's bookstore here in Irvine, California - A Whale of a Tale, a great shop - and Margaret and I helped her out yesterday with crowd control for a signing by "Weird Al" Yankovic. Afterward, a few of us met for dinner at a neighboring brewpub, and the conversation naturally steered to Borders' filing for bankruptcy.

One of our dining companions, an illustrator, had earlier in his career worked at Borders, and had some revealing stories about top-down management and a failure to understand what sets readers apart from general customers - familiar complaints, among many, about the once-great independent chain's plunge into insolvency, which we generally agreed began when it became part of massive corporations (K-Mart).

There wasn't much of it at our table last night, but I was thinking this morning about the general sense of popular condemnation when a company like Borders goes under, even if it is a reorganization plan. We tend to focus on the missteps and critical junctures in which wrong decisions were made, and that maybe the company go what it deserved. Which is fair enough, given that we are, at heart, a puritanical and punitive society (and that is a whole other blog post).

But perusing the list of creditors this morning is pretty sobering (the filing details are available here). Some of the biggest publishers are owed some serious money in a business in which margins are shrinking by the day. Those owed double-digit millions include Penguin ($41 million), Hachette ($37 million), Simon & Schuster ($34 million), Random House ($34 million), HarperCollins ($26 million), Macmillan ($11 million), and Wiley ($11 million).

Who knows how this will turn out. It could be Borders will reorganize and come out leaner and more competitive (it plans to close nearly one-third of its stores, so it's hard to see it re-establishing itself as the premier chain). And it could be that the creditors come out of this with a minimal loss of blood. But as my agent, Jane Dystel, pointed out in a blog post back when Borders first began halting payments to vendors, this is not a good thing for book publishing. And it is not a good thing for authors (um, me).

I can't help but think that given all the structural problems publishers are facing in these days of high unemployment, stagnant (if not reduced) wages, and a depressed retail world, that book publishing is facing a year of critical importance to its survival. And I hope, for all of us, that it survives relatively intact.
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