Borders (retailer)

Based on Wikipedia: Borders (retailer)

The Bookstore That Died Twice

In September 2011, the last Borders bookstore in America closed its doors. About nineteen thousand people lost their jobs. The shelves were picked clean by bargain hunters. The fluorescent lights went dark in strip malls across the country.

But here's the strange part: Borders isn't entirely dead. Walk into a shopping mall in Dubai or Kuwait City today, and you might stumble upon a Borders store, complete with the familiar logo, selling books and toys and stationery as if nothing ever happened. The brand that became synonymous with the death of brick-and-mortar bookselling in America lives on in the Middle East, owned by a company that had nothing to do with the original collapse.

How did a bookstore founded by two brothers in a Michigan college town end up as a cautionary tale about retail hubris, only to be resurrected halfway around the world? The answer involves Kmart, Amazon, a World Trade Center location, and a series of spectacular miscalculations about the future of reading.

Two Brothers and a Used Bookshop

Tom and Louis Borders were students at the University of Michigan in 1971 when they opened their first store at 209 South State Street in Ann Arbor. This was the early seventies, when college towns still had that particular smell of patchouli and idealism, and independent bookstores were community institutions rather than endangered species.

The brothers had a knack for the business. Four years later, they bought out Wahr's, an eighty-year-old bookstore that was closing down. They brought in specialists to stock it with rare books, hired a restorer who moved his bindery upstairs. They renamed part of the operation Charing Cross Bookshop, a nod to the famous book-selling district in London.

For fourteen years, Borders remained a local Ann Arbor institution. Then, in 1985, they opened their second location in Beverly Hills, Michigan. By 1989, they'd hired Robert DiRomualdo, a former president of Hickory Farms, the mall kiosk company famous for selling summer sausage and cheese logs to holiday shoppers. His job was to turn their little bookstore into something much bigger.

This is where the story starts to get complicated.

The Kmart Interlude

In 1992, Kmart bought Borders. This might seem like an odd pairing—the discount department store chain and the bookstore—but Kmart had actually been in the book business for eight years already. They'd purchased Waldenbooks back in 1984, a mall-based chain that put small bookstores in shopping centers across America.

Waldenbooks was struggling. Kmart executives had tinkered with the inventory, experimented with discounting, and generally made the kinds of decisions that happen when a company that sells lawn furniture and tube socks tries to run a literary establishment. The idea behind buying Borders was that its experienced management team could rescue the floundering Waldenbooks operation.

The plan backfired spectacularly. Instead of the Borders team saving Waldenbooks, most of the Borders senior management quit. Now Kmart had an even larger and more unwieldy book division, right as Barnes & Noble and Crown Books were expanding aggressively into the market.

Facing fiscal problems and angry stockholders, Kmart did what struggling corporations often do: they spun off the problem. In 1995, Borders became its own publicly traded company, initially called Borders-Walden Group before settling on Borders Group by year's end. The company remained headquartered in Ann Arbor, now carrying Waldenbooks as a subsidiary.

The Superstore Era

The mid-nineties through the early two-thousands were the golden age of the book superstore. These weren't the cramped little shops of your grandmother's era. They were cavernous spaces, often occupying twenty or thirty thousand square feet, with comfortable chairs for browsing, in-store cafes serving overpriced coffee, and that intoxicating smell of new paper and binding glue.

Borders expanded internationally. Singapore in 1997. Australia and New Zealand. The United Kingdom and Ireland in 1998. Malaysia in 2005. The United Arab Emirates in 2006. At its peak in 2003, Borders Group operated 1,249 stores under the Borders and Waldenbooks names.

Some of these stores became local landmarks. The highest-grossing Borders in America was a remodeled location in Puerto Rico, generating seventeen million dollars in annual sales. Another famously successful store sat at 5 World Trade Center in New York City—until September 11, 2001, when it sustained damage and never reopened.

In 2004, Borders partnered with Seattle's Best Coffee, a Starbucks subsidiary, to run cafes inside their superstores. This was the model: come for the books, stay for the latte, maybe buy a journal or a CD from the music section. For a while, it worked.

The Fatal Miscalculation

Here's the decision that killed Borders, though nobody knew it at the time.

In 2001, Borders outsourced its online book sales to Amazon. Rather than building their own e-commerce platform, they essentially told their customers: if you want to buy books on the internet, go to our competitor's website.

This made a certain kind of sense in 2001. E-commerce was still recovering from the dot-com crash. Amazon was bleeding money and nobody was sure the company would survive. Building and maintaining a sophisticated online retail platform was expensive and complicated. Why not let someone else handle it?

The problem was that the someone else was Amazon, which was busy perfecting the art of selling things online and would eventually destroy not just Borders but reshape the entire retail landscape. For six years, Borders sent its customers to Amazon, training them to buy books from the company that would become their executioner.

In March 2007, Borders finally ended the Amazon partnership and announced plans to launch their own online business. By then, it was far too late. Amazon had a six-year head start and millions of customers who'd already learned that buying books online was easier than driving to the mall.

Death by a Thousand Cuts

Borders' last profitable year was 2006. After that, the numbers turned catastrophic. Revenue dropped by one billion dollars over the next four years.

The company tried everything. In 2008, they opened concept stores with Digital Centers, selling electronic devices like MP3 players, digital photo frames, and the Sony Reader—an early e-book device that would soon be obliterated by Amazon's Kindle. They installed video monitors displaying news and financial information. They launched a free rewards program to compete with Barnes & Noble's paid membership.

None of it worked.

In March 2008, Borders announced it was looking for a buyer. They were in debt and getting deeper. To keep the lights on, they borrowed forty-two and a half million dollars from Pershing Square Capital Management at an eye-watering interest rate of twelve and a half percent. Their stock, which had been trading around seven dollars, crashed to five dollars on the news of the loan. By January 2009, it had fallen to fifty-three cents.

The executive suite became a revolving door. CEOs came and went. Board members resigned in batches. Holiday sales figures were described, with corporate understatement, as "disappointing." Employees reported major cuts in payroll hours.

The International Unraveling

As the American operation spiraled toward bankruptcy, the international Borders stores began breaking away like ice calving from a glacier.

In September 2007, the United Kingdom and Ireland stores were sold to Risk Capital Partners, which licensed the Borders name. In June 2008, the Singapore, Australia, and New Zealand stores went to REDgroup Retail. These were now independent companies—they just happened to share a brand name with the sinking American ship.

The UK and Ireland stores collapsed first. In November 2009, they went into administration, the British equivalent of bankruptcy. All stores closed by year's end. About eleven hundred and fifty people lost their jobs.

Singapore, Australia, and New Zealand followed in June 2011, when REDgroup Retail went into administration. The stores that had once reported the highest revenue per square meter in the entire Borders empire simply vanished.

The Final Chapter

On February 16, 2011, Borders Group filed for Chapter 11 bankruptcy protection in the United States. They listed assets of one point two seven five billion dollars and debts of one point two nine three billion. The company announced it would liquidate and close two hundred and twenty-six stores immediately.

There was still hope. Private equity firms expressed interest. A company called Najafi Companies made a purchase offer. But the creditors rejected it. The bidding deadline came and went without a buyer.

On July 22, 2011, Borders began closing its remaining three hundred and ninety-nine stores. The liquidation sales were the kind of retail spectacle that draws crowds: everything must go, prices slashed, fixtures for sale. Business operations ceased entirely in September 2011.

Borders' rival Barnes & Noble acquired the company's trademarks and customer list. In a final indignity, when customers visited the Borders website after September 27, 2011, they were redirected to Barnes & Noble to complete their purchases. The company that had survived sent polite emails to Borders cardholders explaining that they'd acquired "some of its assets including Borders brand trademarks and their customer list."

Books-A-Million, the second-largest bookstore chain in America, picked through the remains. They bought the leases for twenty-one stores, mostly in New England and Pennsylvania. It wasn't much of a legacy.

The Afterlife

But death, as it turns out, was not quite the end.

Remember those franchise stores in Malaysia and the Middle East? They were never owned by Borders Group directly. They were licensed operations, run by local companies using the Borders name. When the American parent company collapsed, these franchises simply renewed their deals with Barnes & Noble, the new trademark owner.

In Malaysia, Berjaya Books had opened the first international Borders franchise in April 2005. The flagship store in Kuala Lumpur's Berjaya Times Square was advertised as the world's largest Borders at sixty thousand square feet—though it lost that distinction when one level eventually closed. The Malaysian franchises continued operating until August 2023, more than a decade after the American collapse.

The Middle Eastern stores have proven even more resilient. Al Maya Group, which had opened the first Dubai location in October 2006, purchased lifetime rights to the Borders brand in the region from Barnes & Noble in 2015. They diversified beyond books into toys and stationery. As of 2025, Borders stores still operate in the United Arab Emirates, Oman, Qatar, and Kuwait.

These stores exist in a kind of parallel universe, untouched by the American bankruptcy, unaffected by the closures that eliminated the brand from its home country. The logo is the same. The name is the same. But the company behind it has no connection to Tom and Louis Borders, to Ann Arbor, to any of the decisions that led to the original collapse.

What Killed Borders?

The post-mortems have been written many times. Analysts point to the Amazon partnership as the original sin—six years of sending customers to a competitor while the digital revolution transformed retail. Others blame the debt load, the revolving-door management, the failure to develop a credible e-book strategy while Amazon's Kindle devoured the market.

But there's a simpler way to understand what happened. Borders bet that people would always want to drive to a physical store, browse the shelves, and carry home paper books. For a while, that bet was correct. Then, suddenly, it wasn't.

The company that started as two brothers selling used books in a college town grew into an international empire, then collapsed under its own weight, then was resurrected in pieces on the other side of the world. It's a peculiarly American story of ambition and overreach, of corporate consolidation and private equity, of a brand that outlived the company that created it.

Somewhere in Dubai, right now, someone is probably browsing the shelves of a Borders store, unaware that they're standing in the afterlife of a retail empire that died in Michigan strip malls fifteen years ago. The fluorescent lights hum. The books sit in neat rows. The logo on the door is the same one that Tom and Louis Borders hung above their first shop in Ann Arbor, back when the future of reading seemed like something you could hold in your hands.