Where are they now? Borders brothers long gone from Ann Arbor as chain nears bankruptcy
As the book store chain that bears their name approaches bankruptcy, brothers Tom and Louis Borders are nowhere to be found.
That's partly because they left Ann Arbor years ago. Louis is an entrepreneur in Silicon Valley, and Tom is involved in a financial business in Austin, Texas.
The Louisville natives started Borders Book Shop on South State Street in 1971. After Louis developed innovative inventory management software, the company transitioned into expansion mode. In 1992, the brothers sold it to retailer Kmart Corp. and stepped out of management of the company.
At the time, Borders had just 21 stores. Today, the company has 25 times as many Borders stores -- an extremely costly footprint that is expected to drive Borders Group Inc. into bankruptcy as early as today.
When the Borders brothers sold their budding bookstore chain, the company was well known for its impeccable customer service, top-notch inventory system and large-format approach that uprooted the way the books were sold.
But the Borders shopping experience eroded over the years as the chain grew in size, management became unwieldy, the Internet encroached on sales and electronic books emerged as an alternative for avid book readers.
What is it like for the Borders brothers to watch their company slide into disrepair?
They're not talking. In fact, from what I can gather, Louis and Tom Borders have said next to nothing about the bookstore chain over the last eight years or so.
I reached Tom's office in Austin this morning, but his administrative assistant told me he's rejecting all interview requests.
Louis is in Silicon Valley somewhere. Every phone number I've encountered so far for him doesn't work.
Louis famously formed grocery delivery website Webvan.com in 1999 only to see the company go out of business in 2001 as part of the dot-com bubble bust. The San Francisco Chronicle described Webvan, which lost nearly $1 billion, as "one of the dot-com era's most spectacular failures."
The Washington Post got Louis on the phone recently and he "declined to discuss his namesake's problems or even whatever fondness he may hold for what's left of his first big idea," the Post reported.
"'I've been away for the company for a while, and I just don't want to talk about it,' he said, before quickly hanging up," the Post reported.
Louis' latest venture, a company called MyWire.com, appears to have failed. That firm was formed in 2002 as KeepMedia.com, a paid service that aimed to provide archived magazines in digital format for readers.
"We feel we're right on the cusp" of a mass audience willing to pay for content, Borders told the Ann Arbor News in 2003, according to our archives.
Eight years later, Borders itself can attest that media companies are still struggling with that same challenge.
Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.
Comments
Nearly Normal Warren
Tue, Feb 15, 2011 : 4:45 p.m.
I disagree with those who say that it looks like the brothers don't care. I knew them and worked for them when the company began expanding. Believe me, they care. The kindest thing they can do at this point is not comment.
T. Kinks
Tue, Feb 15, 2011 : 2:38 p.m.
I love Borders & my kids do too. It is the friendly service that you get there that keeps me coming back. I hope they can pull out of this w/ some restructuring. Good Luck Borders!
CynicA2
Mon, Feb 14, 2011 : 10:27 p.m.
The brothers obviously put the bookstore behind them long ago - and so will Ann Arbor. It had a nice, long, run and ultimately fell victim to the excesses of MBA know-it-all capitalism, and an obsolete business model. RIP. I certainly wouldn't be surprised to see all three stores here close, eventually, but don't have a clue which will be the first to go. Also, 106 BILLION dollars sounds like a ridiculously high amount of debt for a web start-up like Webvan. Is it possible that number is incorrect? I could believe 1 billion, or maybe even 10 billion, but not 106 billion.
Knobby Kabushka
Mon, Feb 14, 2011 : 10:18 p.m.
It was sold to K-Mart - that is all anyone really needs to know why Borders failed
UofM_Fan
Tue, Feb 15, 2011 : 11:51 a.m.
Oh no. Their failure came from post-KMart days. After leaving KMart they were doing very well. I can probably dig up copies of my $40 stock options proved it. No, the problems started well after that. The people running the show were short-sighted and had no innovation. As things got worse, turnover at the top accelerated and they got desperate. You have to look no further than "Build a Bear". That was going to be what saved the company? They were late to the Internet, they were late to the ebook reader. When ever the industry changed, Borders tried to convince itself that it was just a passing fad but then ended up always playing catchup. It was mismanaged for years.
Nathan Bomey
Mon, Feb 14, 2011 : 9:08 p.m.
Here are stories by Newsweek, CBS and the San Francisco Chronicle indicating that Webvan burned through about $850 million: <a href="http://www.cs.trinity.edu/rjensen/readings/dumb_deals_101.htm" rel='nofollow'>http://www.cs.trinity.edu/rjensen/readings/dumb_deals_101.htm</a> <a href="http://articles.sfgate.com/2001-10-04/business/17621485_1_louis-borders-webvan-kaiser-foundation-hospitals-warehouse" rel='nofollow'>http://articles.sfgate.com/2001-10-04/business/17621485_1_louis-borders-webvan-kaiser-foundation-hospitals-warehouse</a> <a href="http://www.cbsnews.com/stories/2003/07/28/tech/main565433.shtml" rel='nofollow'>http://www.cbsnews.com/stories/2003/07/28/tech/main565433.shtml</a> Nathan
A2K
Mon, Feb 14, 2011 : 9:08 p.m.
I loved the original store on State St. it was the one and only store where (as a kid) I'd go with mom or dad, and they'd say "I'll buy you any books you want" Of course, I still adore reading more than anything. I never heard anything good about Corporate Border's management...every single person I knew who worked there hated the top-heavy, buzzword-mad, psych-test-job-interviews, stagnant, soul-killing corporate culture. No wonder they're going bankrupt.
Paula Gardner
Mon, Feb 14, 2011 : 9:06 p.m.
Nate's on his way to an event - in the meantime, I found this online report: Despite its attempt to reduce expenses and increase sales, Webvan filed for Chapter 11 bankruptcy protection from creditors on July 9, 2001, making it one of the most expensive dotcom failures in the history of the Internet bubble. Webvan closed all of its operations, laying off approximately 2000 employees. At its bankruptcy, the firm carried $1.2 billion in assets and $106 billion in debt. On July 16, 2001, shareholders filed a lawsuit against Webvan alleging that the firm violated U.S. securities law because its IPO contained materially false and misleading information.
Paula Gardner
Mon, Feb 14, 2011 : 11:29 p.m.
AlwaysLate, Please email me at PaulaGardner@annarbor.com - I've tried to reach you through the system but my email was just kicked back.
AlwaysLate
Mon, Feb 14, 2011 : 11:16 p.m.
Hi Paula, As a former Borders employee, I've been try to comment on the article for the last hour. However, A2.com is not accepting my entry. Are you guys blocking further comment on this article? Or, more importantly, are you blocking just me? Thank you.
Snehal
Mon, Feb 14, 2011 : 9:32 p.m.
106 BILLION? Are you sure?
John B.
Mon, Feb 14, 2011 : 8:53 p.m.
Yes, that Billion-Dollar loss number caught my attention also. Nathan, is it correct? Or was it (I hope) a much smaller amount?
Macabre Sunset
Mon, Feb 14, 2011 : 8:47 p.m.
The original bookstore was wonderful. The chain struggled to be anything other than a chain. I remember web grocery delivery when I lived out there. Even looked into it because we were the perfect demographic. The convenience factor of not traveling one mile and wandering through the aisles was replaced by the annoyance of scheduling a delivery. And you knew they'd be giving you the bread from the front of the rack rather than the back. It generated a lot of buzz, but it just wasn't a money-making idea. I find it hard to believe they sunk a billion in venture cap money into that one. They must have imagined total success within months of launching.
John B.
Mon, Feb 14, 2011 : 8 p.m.
Do we know how much each brother received at the time of the sale? It sounds like Louis hasn't had any significant business success since then, which is unfortunate, since he developed the 'innovative inventory management software.'
timjbd
Mon, Feb 14, 2011 : 7:09 p.m.
Might have been good to talk to some people who remember shopping at the original (like me) and have also shopped at the gigantic box that it is now. See if you can glean anything from the comparison. That might have been something the Border's would want to talk about, too.
Nathan Bomey
Mon, Feb 14, 2011 : 6:59 p.m.
Thanks for the comments; watch for more depth on the history of Borders if and when the chain files for bankruptcy. We've been preparing extensive coverage that should provide a sense for what happened to the company, how it rose to prominence and fell into its current state.
CC
Mon, Feb 14, 2011 : 6:56 p.m.
I agree that it was well researched. However, I don't think the brothers simply "don't care" about the chain. But they sold it- 18 years ago. They cannot be held responsible for the direction the Kmart Corporation took the chain in the years to follow. In fact, the success or failure of their latest projects has nothing to do with Borders outcome. It was a thriving business when they sold it in 1992 and that's where their involvement ends. If anything, contact the Kmart CEO for his input on the situation.
Hmm
Mon, Feb 14, 2011 : 6:46 p.m.
Good article and good researching Nate. It sounds like the Border brothers really don't care what happens to the company and at this point, that's really sad to me. At least issue a platitude or something but the silence is very puzzling to me.