Borders

**Borders Group, Inc.** (former NYSE ticker symbol BGP) is a book and music retailer based in Ann Arbor, Michigan. In its final year, the company employed about 19,500 people throughout the U.S., primarily in its Borders and Waldenbooks stores.

At the beginning of 2010, the company operated 511 Borders superstores in the US. The company also operated 175 stores in the Waldenbooks Specialty Retail segment, including Waldenbooks, Borders Express, Borders airport stores, and Borders Outlet stores.

## History

The original Borders bookstore was located in Ann Arbor, Michigan, where it was founded in 1971 by brothers Tom and Louis Borders during their undergraduate and graduate years at the University of Michigan. The first Borders bookshop opened at 209 South State Street, Ann Arbor in 1971.

Wahr's had been mainly a textbook and school-supplies vendor, but the brothers did not deal in textbooks. They moved the retail bookshop to much larger quarters that had become available across the street at 303 South State, in the former location of the Wagner and Son men's clothing store. The old shop was renamed Charing Cross Bookshop and Tom Frick was sent over from the new bookshop to help.

The downtown Ann Arbor store moved across the street again in 1994 to 612 East Liberty, at the southwest corner of Liberty and State Streets, in the building once occupied by the defunct Jacobson's Department Store. Although not the original location, it was identified as "Borders #1" because it was the flagship store.

Former Hickory Farms president Robert F. DiRomualdo was hired in 1989 to expand the company.

### Kmart and Waldenbooks

Borders was acquired in 1992 by Kmart, which had acquired mall-based book chain Waldenbooks eight years earlier. Kmart had struggled with the book division, having first tinkered with the assortment and later with discounting. In the Borders acquisition, Kmart merged the two companies in hopes that the experienced Borders senior management could bail out floundering Waldenbooks. Instead, many of the Borders senior management team left the company, leaving behind an even larger and more unwieldy division for Kmart executives to handle on the heels of aggressive expansions by rivals Barnes & Noble and Crown Books. Facing its own fiscal problems and intense pressure from stockholders, Kmart spun off Borders in a highly structured stock-purchase plan. The newly formed company was initially called Borders-Walden Group and, by the end of the same year, renamed simply Borders Group.

In 1994, Borders briefly operated a mall-based toy store called All Wound Up, which sold toys and novelty items. Most All Wound Up stores were seasonal kiosks in shopping malls.

### International expansion

Borders was slated to open stores in Canada, starting with a 50,000-square-foot (4,600 m2) retail store in Toronto. However, this was rejected for failing to meet Canadian ownership regulations for book retailers.

In 1997, the company established its first international store in Singapore, occupying 32,000 square feet (3,000 m2) in Wheelock Place, Orchard Road, which was then the largest bookstore there. It subsequently opened another 41 stores in Australia, Ireland, New Zealand, and the United Kingdom and bought 35 Books etc. stores throughout Britain from Philip and Richard Joseph.

In 1998, Borders (UK) Ltd. was established as a Borders Group subsidiary and with its Borders and Books etc. After quickly becoming one of the country's leading booksellers, due to the fierce competition in the UK marketplace, a number of the Books etc. stores closed, and Borders (UK) Ltd. was sold in 2007 to a private-equity investor.

In the third quarter of 2006, the Singapore store emerged as the best performing among the group's 559 outlets, with the highest revenue generated per square meter. At one point, the highest-grossing location in US territory was a remodeled and expanded store in Puerto Rico, generating $17 million in sales annually.

### Franchise stores

In April 2005, Borders Group opened its first franchise store with Malaysia's Berjaya Books Sdn. Bhd. in Kuala Lumpur. It is located in Berjaya Times Square, which is the world's biggest mall built in a single phase, with 7,500,000 square feet (700,000 m²). The store in Berjaya Times Square was advertised as being the world's biggest Borders at 60,000 square feet (5,600 m²); however, this has since changed with the closure of one level of the store. Borders' second store in Malaysia is located in The Curve, Mutiara Damansara. The third Borders store opened in Queensbay Mall, Penang on December 7, 2006. Borders opened a franchise store in the Mall of the Emirates in Dubai, UAE in October 2006. Despite financial difficulties in the domestic market, Borders continued to expand its franchises, adding stores in Malaysia, Oman, and Sharjah.

### Changes in business plan

In 1998, Philip Pfeffer succeeded Robert DiRomualdo as chief executive.

In 2003, Borders had 1,249 stores using the Borders and Waldenbooks names.

In 2004, Borders reached an agreement with Starbucks subsidiary Seattle's Best Coffee to operate cafes in its domestic superstores under the Seattle's Best brand name.

In March 2007, Borders Group announced it would scale down the number of Waldenbooks outlets it had by half, to about 300, in the next year.

Also in March 2007, Borders Group announced the disposal of its Ireland and UK businesses, including its Books etc. business in the UK, with the aim of revitalizing the core US business; however, it was also announced that Borders Group would retain the Paperchase stationery business. International expansion would be likely to continue via franchising.

In 2008, Borders opened 14 concept stores nationwide, which included a Digital Center, offering select electronic devices such as MP3 players, digital photo frames, and the Sony Reader. The concept stores were located in Ann Arbor, Michigan, Denver, Colorado, Las Vegas, Nevada, Panama City Beach, Florida, Noblesville, Indiana, Monroeville, Pennsylvania, and Alameda, California. The latest Borders Digital Center opened in Alameda in January 2008.

In late 2007, Borders installed digital video monitors in select stores. The monitors display special programs, as well as news, sports, and financial information provided through Ripple Networks, Inc., a California-based marketing service.

Borders Group also launched a customer appreciation program called Borders Rewards. In contrast to a membership from Barnes & Noble, which was a paid-for membership that entitled customers to discounts, Borders Rewards was a free program with discount coupons and the ability to earn store credit for purchases. In addition, in September 2009, following the lead of Barnes & Noble, the chain discontinued its fee-based wireless service provided by T-Mobile and began implementing a free Wi-Fi network provided by Verizon.

## Brands

* All Wound Up (toy store)
* Books, etc. (bookstore; only found in UK)
* Borders
	+ Borders Asia Pacific
		- Borders Australia
		- Borders Malaysia
		- Borders New Zealand
		- Borders Singapore
	+ Borders Canada
	+ Borders Europe
		- Borders Ireland
		- Borders (UK) Ltd.
	+ Borders Express
	+ Borders Middle East
		- Borders Oman
		- Borders UAE
	+ Borders Outlets
* Paperchase (stationary store)
* Waldenbooks
	+ Waldenkids

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