Proposed merger between Borders Books and Barnes and Noble

Borders Books takeover bid for Barnes and Noble

Yesterday the book industry was met with the astounding news that the number two bookseller, Borders, was bidding for ownership of industry leader, Barnes and Noble. On the news B&N shares shot up nearly 20 percent as investors weighed in on the proposal.

Why would the two largest book chains merge?

First, sales of physical books sold in conventional stores have been falling. This is because online sellers like Amazon.com have been grabbing huge chunks of book sales and major retailers, such as Walmart and Target, have been selling large numbers of bestselling book titles at discounted prices. Add to this the growing number of electronic (e-book) book sales To put it mildly, this has caused a perfect storm for traditional brick n' mortar booksellers who have always prided themselves as the place to go to find books. Now, more and more, the least profitable part of their business is book sales with more profits coming from their in-store coffeehouse along with ancillary sales coming from gift items and greeting cards.

If this deal goes through it will be reminiscent of the merger of K-Mart and Sears over six years ago as orchestrated by real estate investor Edward Lambert.

Depending on whether you were a customer or investor, the results of that merger could be telling when it comes to the proposed Borders - Barnes and Noble deal. In the Sears - K-Mart merger, operations were consolidated in the Sears headquarters in suburban Chicago and the corporate offices of K-Mart in Michigan were shuttered. They then changed the name to Sears Holdings to reflect the ownership of its real estate. To Ed Lambert the Sears - K-Mart deal was all about leveraging their properties by closing underperforming stores then selling the property. This drove the stock price up and satisfied most investors.

On the other hand, the surviving physical stores operating under the Sears and K-Mart names continued to languish right up until today with their stores continuing to lose any competitive advantages. Other than hard goods lines like Craftsman and Kenmore, there are few reasons to shop one of their stores.

If a Borders - Barnes and Noble merger result in similar results, over time there will be fewer bookstores filled with fewer book titles. Some have imagined their bookstore of the future consisting of a cafe, gifts, periodicals and a small number of books. Rather than look through stacks of books customers will instead be ushered to download stations where they would be able to purchase e-books while sipping on a cup of coffee.

Stores would be half the size of today with fewer employees.

However that would be a short term situation as other big box chains such as Walmart and Target add their own download stations.

That could force the Borders - Barnes and Noble stores to downsize once more resulting in a Panera Bread style cafe with gifts and book downloads.

Whatever happens, for some time it has been speculated that the end of the conventional bookstore was on the horizon. All of which has been hastened by the technology that has led to eBooks and eBook readers.

Lessons from Willy

I want to share with you something that happened last night. 

Anyone who really knows me understands that for me, life is all about the journey. My bike has become a large part of that journey because it allows me to see life in slow motion without the frantic speed of life we all have gotten so dependent on while driving around in a car. 

Late yesterday afternoon the ice and snow had cleared enough so I could chance riding 20 miles to Holland. About eight miles from home, along a lonely stretch of backroad suddenly I heard the one sound every cyclist fears. Pop! Sure enough, I had blown a tire. And, worse yet, it was my rear tire--the one that is hardest to change. Like many cyclists I carry a spare tube and tools to change it. Unfortunately the temp was around thirty and the sun was about to set. After flipping my bike over on its handlebars I began to remove the rear tire. Down the road I noticed a young man in hunting fatigues walking a small dog. He came within 50 feet or so then turned around. Without thinking much about it, I continued to work on my bike. 

A few minutes later along came the young man, this time without his dog. He asked, "can I help? I have a garage just around the corner. It would be easier to change your tire there." Looking at my options it seemed like a good thing to do. He then proceeded to hoist my bike into his arms and carry it down the road all the way to his garage; leaving me to follow along with the spare parts. 

When we arrived at the small country house with the garage out back, he opened the overhead door revealing a neatly arranged garage with an older SUV. I asked his name. Willy. Then I asked what he did for a living. "I just like to help people." Did he attend school? No, school didn't agree with him. For the next half hour we worked at removing the old tube and replacing it with the spare. When I pulled out a small hand pump to fill the tire, he offered to use his electric generator. A time saver, for sure. But once we hooked up the generator the new tube only partially filled. Drat! The new tube was defective and had a hole in it. I made some remark about buying cheap replacement tubes at Walmart. He said his aunt just got some sour milk from there. 

He asked, "do you have anyone to call." It was time to throw the lifeline. I produced a cell phone from my pocket and called Anne to pick me up. Luckily she was at home and had not left for our pickup spot in Holland. It would be twenty minutes and she'd be here to save the day. Lucky me. 

Willy asked if I wanted to come into his house for a cup of coffee. I agreed. Inside sat his aunt. My guess is she's in her late 70s. My intent was to pay Willy for his help but I didn't have any money. Willy had mentioned he loved dogs so I used that as an excuse to ask him to write his name and address. "I want to send you a picture of my dogs." His aunt told me she'd write down his name for me. Then she said, "Willy suffers from seizures and can't work." She also said he was mentally challenged. His parents had abandoned him at age 3 and she took him in. "When I took Willy in he was not even potty trained." I mentioned he had said he likes to help people. "Yes, he's a good kid. They took his moped away because of the seizures so it is hard for him to go anywhere to work. So instead he helps neighbors with their lawns and other chores." She went on. "Willy likes going to church. It's a long trip to make but we do it because he loves the Lord so much." I found out his church is located a good 20 miles away. It's a large church located in a suburb just outside Grand Rapids. I wondered why he had left school. Probably was made fun of by the other kids, that's pretty normal for someone who is challenged and can't keep up. He had probably used what the system could offer then was left to his aunt. I imagine when she can no longer care for him he will be placed in adult foster care. In the meantime they are there for each other. Not perfect, for sure. But better than other options. He's in a loving home and can help his aging aunt.  

We continued to talk until Anne drove up. Willy helped me put my bike in her car and we were off. I looked at the house and there was the aunt, waving goodbye. 

I believe things happen for a reason. How many times over the years had I passed by that house without ever noticing it? Hundreds, I suppose. It's one of my favorite back roads to take while heading out on a bike trip. I'll send him a card with the shot of our dogs. Maybe I'll include a gift card. 

As we all rush through life we often fail to notice the little things that make life so worthwhile. Yesterday I was blessed by a young man and his elderly aunt who offered me hospitality without expecting anything in return. In these times of rough financial waters with politicians ranting and raving, and with seemingly uninterrupted bad news followed by more bad news, isn't it great to know that when all the screaming stops there are still good people out there who truly care about their fellow human? Truly, yesterday I was blessed. May you also be blessed today.