Comment Re:it's a temporary gap. (Score 1) 398
That's not what did them in. I worked for Borders during the period when they suddenly started growing, through when things started falling apart. I was also very much aware of the internal conversations regarding the growth of the Internet and what to do about potential competition between a (then small) Amazon.
Without getting into a long, rambling story, the fall of Borders largely happened because the chain was sold to KMart and more or less merged with Waldenbooks. The management team that had made Borders a success left and a number of Waldenbooks executives more or less took control, with their mall-bookstore mentality. Everything that had made Borders successful went away, and they went from being far superior to B&N to being a poor carbon copy of them.
An Internet plan was in development really early in the game, back when Amazon had just started. Borders even did early sales via Gopher pages, even. When the Waldenbooks people were moved into Borders management, they scuttled the plan entirely. Year later they (ironically) ended up doing online sales via Amazon. If they had simply followed through on their initial plan, they would have been the first to do Internet book sales in a large way.
Instead, they canceled the Internet plan, dropped the number of titles in each store to B&N levels (half or less of what most stores had before that), started rebranding mall bookstores as Borders Express, and lost everything that made them special. That drove customers away in droves. They had required book knowledge tests for new employees in the past, and were able to keep knowledgeable employees long-term while paying barely above minimum wage, partly by being very pleasant employers, and partly by offering a lot of little perks that the employees enjoyed. They cut out all the little perks and drove away the long-term employees, leaving people who didn't know a lot about their products, which drove away much of the rest of their customer base. They kept expanding the number of stores despite all the monetary losses, and the whole thing eventually just crumbled away beneath them.
In the end, it was a textbook case of what happens when the original founding family of a successful store chain decides to cash out.