So why was I dumbfounded and furious at the appointment of a new CEO, especially when the performance of the previous leadership had clearly been lacking? Because Borders' basic problem, based on my years of observing the chain's stores firsthand, isn't primarily its financial management. Not only that, but all too often, finance types, even those are supposed to know the industry well, usually immediately undertake cost-cutting measures that undermine sales revenues far more than the savings created by the reduced overhead.

Now... what are my observations worth? Since I'm offering them free, no reader has to pay for them, but I will note that over the last ten years, I've personally visited 180 of the 500 U.S. superstores and close to 100 of the Waldenbooks/Borders Express stores. In all of them I've talked to the staff, usually managers or assistant managers. Based on those visits and observations, my conclusion is really very simple: Borders' upper management doesn't know all that much about selling books, and they don't appear to pay much attention to those who do, even those in their own organization.

The first thing to understand about bookselling is that it's far better to have too many copies of desirable and saleable books than too few. After all, you can always return the excess to the publisher. The second is that no bookstore or chain ever consistently guesses right on the numbers of books that will sell. The third is that you cannot sell what you do not have. Even if you can order it, most customers want that book now, and they'd rather go to a competitor than come back a week later. This means that keeping inventory down to reduce costs is a very dangerous gamble. The fourth is that a store never sells all of what it orders of best-selling authors' new books. So cutting orders on new releases, merely because the last order didn't sell out, only ends up ensuring that the next one will definitely sell fewer copies. And finally, having only one paperback copy of newer paperback releases will result in lost sales.

Now... for some specifics. From talking to Borders and Waldenbooks managers coast to coast, I've discovered that Borders managers, in general, have far less discretion than Barnes & Noble managers in ordering books that don't fit the predetermined sales model for their stores.

Possibly because of financial problems, they've understaffed their customer assistance sections, often relying on computer terminals. Terminals don't sell books; at best they allow a customer to find and buy a book -- if the customer doesn't get frustrated first.

For years, the vast majority of Borders' book carrels were designed so that they would only hold paperback books, and many, many, Borders stores still retain that pattern. That means the hardcovers are elsewhere, well away from the paperbacks. Again, cost-effective and space-effective as that might have been, it was and is lousy marketing. Readers shouldn't have to go to two different locations to find books by the same author. Also, putting the new or recent hardcover next to the paperback does occasionally tempt readers into buying the hardcover, and there are a lot more dollars in a hardcover sale than in a paperback purchase.

I've also collected stories across the miles and years, almost none of which are particularly flattering to Borders corporate management. One case in point was the Waldenbooks in a large urban mall, which for something like fifteen years racked up the largest sales of fantasy and science fiction of any Borders outlet in more than 500 miles in any direction and sold well in other areas as well. Borders opened a superstore across the street from the mall, and the Waldenbooks still outsold the superstore on a sales per square foot basis. Then Borders closed the Waldenbooks, and from what I could determine, essentially forced out the Waldenbooks manager responsible for its success, and there was no change in the sales of the Borders superstore. In another case, Borders fired a regional community relations manager on the grounds that he wasn't as effective as he should have been... and replaced him with someone who was far less effective.

Last year, I visited a relatively large Waldenbooks in a university town more than a thousand miles from my home town, a town where there was no Borders, either, and where I discovered huge gaps and empty bookshelves. I asked why, and the manager told me that they'd been mandated to return a significant portion of their inventory, presumably to raise cash. In looking over the F&SF shelves, there was a very clear pattern. All that was left were the most recent paperback releases of name authors. There's a real problem with this because it offers no choice to the reader. Readers won't pick up the latest release of an author they haven't read before. The stores that are the most successful, particularly with F&SF, are those who carry at least one copy of the backlist titles of successful authors, and a wide range, if few numbers of each title, of newer authors.

F&SF, romance, mystery, and thriller readers tend to like series and to follow authors. Once such readers discover a "new" author they like, they go through all the titles. But they can't do it if the titles aren't on the shelf, and this has been an on and off historic problem at far too many Waldenbooks and Borders stores.

I realize that smaller mall stores can't carry everything, but they ought to carry at least the first book of on-going series, whether that series is my Recluce series or the Wheel of Time, or the Malazon series.

Then, there's what I heard from an experienced editor, who, years ago, told me, in all seriousness, that his company was having trouble with the F&SF buyer for Borders because he didn't understand book-buying. I asked why and was told that the buyer had no publishing sales experience, but had been a very successful buyer of hardware items, such as hammers and screwdrivers.

Now... I'm not against Borders. I'm really not. My living depends on bookstores, and there are many good and hard-working people in all those stores. I am against policies and procedures that are based more on the idea that tight finance controls are more important than selling the product. I have run across a number of very good, very effective Borders and Waldenbooks store managers, and they do an excellent job... but what seems to distinguish most of them is their ability to work around various corporate policies that seem designed to hamstring them at every turn.

In the end, all the "finance" management won't save Borders. All that will save it is an emphasis on selling books better and more effectively, and over the years that's not something that appears to have been understood at the corporate level... and the selection of a "finance" CEO doesn't exactly reassure me that matters are going to change any time soon.

—L.E. Modesitt, Jr.:  1/16/2009 10:43:00 AM