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Borders on the brink, but Kobo continues to grow

A year ago, in the week following Christmas, Canadian publishers and distributors were greeted with the dismaying news that one of the country’s leading bookstore chains, McNally Robinson Booksellers, was significantly scaling back its operations, closing down locations in Toronto and Saskatoon Winnipeg. This year, a retail shakeup on an even bigger scale is taking place in the U.S., where the future of the bookselling chain Borders, which operates 676 bookstores across the U.S., is in question.

Late last week, the Ann Arbor, Michigan“based chain announced it is delaying payments to some of its vendors in an attempt to restructure its debt. The news set off investor panic, resulting in the company’s share price falling by 22 per cent on Friday.

Now, The Wall Street Journal is reporting that at least one major vendor, Rowman & Littlefield Publishing Group (which owns the distributor National Book Network) has temporarily suspended shipments to the retail chain. Other publishing companies, including Hachette Book Group and Sourcebooks, are also reported to be considering similar options. From the WSJ:

“When a customer of that size calls you up and says you aren’t getting a check, that’s a piece of information you have to act on,” said Jed Lyons, CEO of Rowman & Littlefield.

Mr. Lyons said he wanted more information from Borders and expected to learn more from the bookseller this week. “Up until now they’d been paying us like clockwork,” he said.


Mr. Lyons said that about a year ago, National Book Network approached its clients and said that if they wanted their books distributed to Borders, they would have to assume the risk associated with that business. Most clients, he added, responded by saying they wanted to continue shipping to Borders.

Borders is the U.S. retail partner for Kobo, the Indigo-owned e-book company, which nevertheless put a rosy spin on its holiday numbers. In a press release, Kobo reported that it had its best weekend ever on Christmas and Boxing Day, and that the number of registered Kobo users had nearly doubled since mid-November.

Earlier this month we predicted that Christmas would be a record breaker for Kobo, and we have exceeded our expectations driving several ebook downloads per second since Christmas Eve, or an equivalent number hardcover books stacked as high as 50 Empire State Buildings [sic],  Kobo CEO Michael Serbinis said in the release. Kobo also noted that it had experienced some of its biggest gains outside North America, in countries such as Germany, the Netherlands, and Singapore.