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Business & Tech

Can Borders' Silver Spring Store Survive the Revolution in Bookselling?

With the rise of e-readers and other digital gizmos, it's a tough slog for brick-and-mortar bookstores.

With its parent company still bleeding cash despite its bankruptcy filing, the future of popular Borders bookstore in downtown Silver Spring is very much in doubt.

Borders, which filed for protection under the bankruptcy law provisions in mid-February, already has shut more than 200 stores nationwide, including those in Chevy Chase in upper Northwest D.C., and at White Flint Mall.

The Silver Spring store survived that massive round of cuts, but as the shakeout in the bookselling industry continues at an incredible pace, it likely faces either closure or a new owner in the not-too-distant future.

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According to recent filings in federal bankruptcy court in New York, Borders Group (the parent company) is negotiating with an unidentified buyer which has expressed interest in acquiring as many as 200 of its superstores.

Whether the struggling Ann Arbor-based company can pull off this has been doubtful from the start, and just became even more more complicated with last Thursday's news of Liberty Media Corp.’s $1.02 billion offer to acquire the entire Barnes & Noble chain.

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Barnes & Noble--with 703 retail stores and 623 college bookstores nationwide--has been up for sale since last summer, but Liberty Media's bid represents the first serious offer for the chain.

The unidentified bidder for Borders reportedly has expressed interest in approximately 190 of the company’s outlets. Those stores, including Silver Spring, account for nearly all of the chain’s revenues.  Borders has already dumped nearly 228 stores that were losing money, due to lagging sales or high rents making it nearly impossible to remain viable.

A statement issued by Borders said the firm remains “focused” on moving ahead with its overall business plan during the bankruptcy proceedings. 

“We are continuing to evaluate interest in the company as expressed through the ongoing Chapter 11 process,” says the statement.

However, despite the offer for as many as 190 Borders stores, a piecemeal sale of the remaining Borders stores, including Silver Spring, would appear to be the most logical outcome.

Fact is, the digital revolution and the arrival of online competitors such as Amazon.com and others have completely undermined old-fashioned brick-and- mortar bookstores. Literally thousands of independent bookstores have closed down in recent years, including many in the Washington, D.C. metro area. 

Barnes & Noble  was quicker than Borders in entering the e-book arena, offering a line of Nook e-readers and other digital products. Nook ranks second in sales of e-readers trailing only Amazon’s Kindle, according to Forrester Research, a market research firm.

B&N is expected to unveil another new digital innovation at the annual booksellers convention in New York City next week.

It’s likely that B&N’s impressive array of digital products is what prompted  the bid from Liberty Media’s John Malone.  Malone, who made his fortune in cable television, has already invested in outfits like Expedia, the online travel information site, and drugstore.com

Because of the digital revolution, both Borders and B&N increasingly have also turned to selling children’s games and toys and other non-book products in recent years, in an attempt to stem the tide of declining store book sales.

But results in those new areas are mixed, at best.  Operating a large, full-service retail book store has its own set of challenges as well.  Just last week, an unexpected water pipe break in a neighboring store flooded the basement and completely shut down the children’s department of the Barnes & Noble store in Bethesda for several days.

That large book store—and many others across the nation---have also experienced other significant operating difficulties, including outages of their air conditioning systems during heat waves and occasional lack of heat in the winter.

Challenging days are ahead for Borders’ Silver Spring--and bricks-and-mortar bookstores everywhere. Stay tuned.

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