Everything Southern Humboldt and more
Bad news for the economy, and literacy. But then we’ve been looking at the banner at the Bayshore Mall for weeks now.
More room at the mall for Wal-Mart?
Massive layoffs. Recession imminent.
Thanks Tea Party!
The joys of a post-New Deal society.
You know, Obama does have one recourse since we are limited to surplus spending for the first time in history. He can shut down three wars, and bring that spending back to this continent. He doesn’t need Congressional approval for that.
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26 comments
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August 3, 2011 at 12:47 pm
Gordon Inkeles
Silver lining: the Borders closing may open the door to new, well-run neighborhood bookstores, many of which were forced into bankruptcy ten years ago Borders. Publishing market research (sorry, can’t recall the source) indicates that people miss those independents.
The same market research estimated that the window for opening such stores is probably about two years. At that point, if nothing happens in a given market area the book business will move online permanently.
August 3, 2011 at 1:10 pm
Fred Mangels
How can you blame that on the Tea Party???
August 3, 2011 at 2:12 pm
So
That is Eric for you Fred.
August 3, 2011 at 2:17 pm
Bolithio
He can shut down three wars, and bring that spending back to this continent. He doesn’t need Congressional approval for that.
So whats stopping him?
August 3, 2011 at 2:22 pm
Plain Jane
Would he need congressional approval to divert the funding authorized for the wars to domestic purposes, Eric?
August 3, 2011 at 2:49 pm
Not A Native
Gordon makes a good point.
If someone argues that a newly arriving ‘big box’ or ‘national chain’ store is absolutely bad for a local economy, then they should also agree that the closing of one of those stores is ultimately good for a local economy. n’est-ce pas?
Of course, the prospect of newly unused buildings with potential to create an ambience of decline is never welcomed because Americans believe that ever increasing land use is an indicator of our exceptionalism..
But changes in economic activities always create winners and losers in different combinations and distributions. In practice, most everyone evaluates the desirability of an economic activity based on how it affects(or may affect) specific individuals and groups they have an affinity for.
August 3, 2011 at 2:59 pm
AJ
19 out of 25 Items increased In price during the Borders liquidation sale. I’m waiting until books hit 50% off.
The biggest threat to an independent isn’t a chain bookstore. It’s whether the store can offer competitive pricing with web retailers. If I had a for-profit bookstore, I’d offer to order and sell at-cost any title not found in the store. I suspect the number of people willing to order without such an offer pales in comparison to the number who will go home and fire up a web browser. So, it’s better to retain those customers, bring them back to the store with at-cost sales, and occasionally profit from impulse buys made when they return.
August 3, 2011 at 3:37 pm
Not A Native
Well AJ, What do you mean when you write “at cost”? A brick and mortor retailer has “costs” that will make the price of a book higher than what someone can buy it for on the net. e.g. A clerk’s time to make, track, receive and notify the customer of an order, financing for purchases, credit card charges, space to store arrivals.
Most local small business owners say they’re not making much money for themselves. Assuming thats true, they have little leeway to lower their unit prices at all. And if its not true, then they are doing well and have little incentive to offer zero profit transactions.
A retailer can offer a buying(or another) service at a loss, hoping to make up for it with profitable sales. But its risky, many retailers have gone bankrupt using that marketing strategy.
August 3, 2011 at 4:57 pm
Eric Kirk
How can you blame that on the Tea Party???
Because they’ve just locked us into a batshit crazy fiscal policy which is going to pull massive amounts of money out of an already depressed economy. Obviously companies are going to lay people off to weather the storm. They’re not stupid.
August 3, 2011 at 6:02 pm
Fred Mangels
No government spending has been cut, Eric.
I disagree with your Zimbabwean economics but, in the case of this last debt issue, they haven’t cut any spending.
August 3, 2011 at 6:23 pm
AJ
NaN, by “at cost” I mean for the indie owner to calculate how much it costs to order and deliver books for customers (the cost of the books + shipping + employee time + handling of waste materials + storage + any other related costs).
As for marketing strategies, I didn’t suggest owners offer a service “at a loss,” but instead, “at cost.” However, with regard to offering a product at a loss, it’s a well-established tactic to offer what’s called “loss leaders” to get customers into a store, with the hope that customers then order other non-discounted goods. You’ll see this most often with grocery stores. I presume it works because they’ve been doing it for decades. I don’t know if it works for bookstores, but I wasn’t suggesting they try it.
The bottom line is, bookstores have to get customers into their stores to buy, and IMHO, they do that with good selection and good prices and by reducing the attractiveness of ordering from online competitors. Borders offered none of these things.
August 3, 2011 at 6:31 pm
AJ
Umm, and by saying Borders didn’t offer a good selection I refer to the chain’s change in direction that helped lead to its demise. Namely, shifting a lot (half? more?) of its floor space from selling books to selling music, movies, cards, games, and random kitsch, plus comfy chairs and coffee. The “old” Borders (which never graced Humboldt County) was once known for being a go-to place for books. If a customer wants to buy a book and he thinks, “Eh, Borders won’t have it,” well, that’s poison.
Conversely, I expect Eureka Books and Tin Can to always have what I want, and for Northtown Books to always surprise me. That was the case when I went to buy a fairy book for a child’s birthday party. Borders’ concept of fairies was Tinker Bell and Disney galore. The three other stores offered both classic fairy books (Cicely Mary Barker) and other books that were equally valuable.
August 3, 2011 at 9:03 pm
Eric Kirk
I disagree with your Zimbabwean economics but, in the case of this last debt issue, they haven’t cut any spending.
Funny you should mention Zimbabwe, because in the 1990s they implemented your IMF austerity “free market” measures. The result has been disastrous.
August 4, 2011 at 4:55 am
AJ
On the other hand, it’s been great for eBay merchants. I’d go for the guy selling a complete 3rd edition set of 27 uncirculated bills spanning $1 to $100 Trillion. But if you’re on a budget, a single $100 trillion note will run you about $5 USD.
August 4, 2011 at 8:42 am
Fred Mangels
What’s been disastrous for Zimbabwe is Mugabe printing money (zimbabwean economics) to give to his friends, the result being staggering inflation. That, along with displacing the white farmers who made Rhodesia the breadbasket of Africa, with his cronies who know nothing about farming. The result of that being Zimbabwe now imports most its food.
August 4, 2011 at 10:04 am
Eric Kirk
That might account for the decline prior to the 1990s. Since then however, he’s been completely in step with the IMF.
Incidentally, the last time I looked over 40 countries had implemented the IMF austerity measures. You know how many of them came out of hock? Zero. Great track record!
August 4, 2011 at 10:46 am
tra
Incidentally, the last time I looked over 40 countries had implemented the IMF austerity measures. You know how many of them came out of hock? Zero. Great track record!
Well, assuming that the actual goal of the IMF is not to help countries “come out of hock” but rather to keep them on the debt hook, but just make sure they keep making interest payments, then the austerity measures have been very “successful” indeed.
Bruce Cockburn said it better than I ever could:
…North South East West
Kill the best and buy the rest
It’s just spend a buck to make a buck
You don’t really give a flying fuck
About the people in misery
IMF dirty MF
Takes away everything it can get
Always making certain that there’s one thing left
Keep them on the hook with insupportable debt…
August 4, 2011 at 11:58 am
Erasmus
But the IMF was headed by a socialist —— Monsieur Strauss-Kahn! Obviously, the interests of the poor had to be taken into account. We are assured by all the progressive people with a conscience that socialists are warm-hearted advocates of the downtrodden. How could it be otherwise?
August 4, 2011 at 12:06 pm
Eric Kirk
A “Third Way” Socialist.
Probably along the lines of Social Democrats USA? They endorsed Nixon.
http://www.socialdemocratsusa.org/
August 4, 2011 at 12:15 pm
tra
Being able through the labels people apply to themselves is exactly the point, Erasmus.
August 4, 2011 at 12:19 pm
Not A Native
OK AJ we agree about “at cost”. My point is that most merchants in HumCo say they’re just scraping by as it is. Essentially, they are already selling “at cost”. So your suggestion wouldn’t result in reducing the prices those retailers ask and therefore wouldn’t create higher sales.
In general, there seems to be belief in HumCo that everyone is already spending all the discretionary income they have. That reflects the idea that most in HumCO are living marginally(either by choice or by no other choice). Given that belief, merchants see investment in local marketing as useless because there’s no more ‘market’ to be had. I’m not saying I personally agree with that analysis, but I heard a lot of anecdotal stories from shopkeepers who do.
August 4, 2011 at 1:41 pm
AJ
I get your point NaN. I’m simply skeptical that the profit margin on new book sales is so thin. I’d like to hear it explained by a bookstore owner.
For example, my wife used to work in a bookstore. The store’s return agreements with publishers meant that if a book didn’t sell, it would be shipped back to a publisher for a full refund of the original wholesale cost (or the store provided proof that the books had been destroyed by removing and shipping back the covers).
I’m curious about the economics of running a new bookstore because it doesn’t necessarily play by the same rules as stores that sell other types of products. Maybe return agreements are not as favorable for a small indie bookstore, but I don’t know… I heard the same story when talking with a local bookstore owner who stocked magazines. How could he afford to stock magazines, I wondered. Well, because if a magazine doesn’t sell, he’s not really out money, other than the money lost by not stocking better-selling magazines. That was 10 years ago. Have things changed? Here’s a blog post from last week with a complaint from an indie publisher about how bookstore returns work.
August 4, 2011 at 2:42 pm
Not A Native
Well AJ, Yeah bookstores operate on a consignment system. Grocers work the same way for certain items. Distributors give credit for food that hasn’t sold by its ‘pull’ date. In theory, automobile(and other big ticket) dealers don’t work that way. But in practice, they pay no interest(for a time) on the loans they take to buy showroom cars.
The primary thing a retailer offers is display space and the infrastructure it takes to support that space. Along with instant gratification for the buyer. If the products on display don’t sell(in enough quantity), the money spent to maintain that space is lost. Getting credit for unsold merchandise doesn’t doesn’t pay that cost.
Used to be Sears(and others) had ‘catalogue stores’ in sparsely populated, low volume areas where all merchandise had to be ordered from pictures. In a real way, the internet has returned retail to that model with new technology that makes it more economical(not to mention the tax avoidance subsidy).
It remains to be seen whether local purchases from a local person through their web based ‘store’(say franchised by Amazon) is perceived by the self proclaimed nabobs of progressivism, like Eric, as ‘helping the local economy’.
August 4, 2011 at 3:21 pm
Not A Native
AJ, this NYTimes article gives a different perspective of the retail trade:
Apparel stores are holding near fire sales to get people to spend. Wal-Mart is selling smaller packages because some shoppers do not have enough cash on hand to afford multipacks of toilet paper. Retailers from Victoria’s Secret to the Children’s Place are nudging prices up by just pennies, worried they will lose customers if they do anything more.
While the free spending of the affluent may not be of much comfort to people who are out of jobs or out of cash, the rich may contribute disproportionately to the overall economic recovery.
“This group is key because the top 5 percent of income earners accounts for about one-third of spending, and the top 20 percent accounts for close to 60 percent of spending,” said Mark Zandi, chief economist of Moody’s Analytics. “That was key to why we suffered such a bad recession — their spending fell very sharply.”
August 7, 2011 at 12:18 pm
Anonymous
WTF Eric Kirk, it’s the Tea Partyies that caused all of the Borders to close down?! You’re not nearly as bright as you think you are.
August 7, 2011 at 2:13 pm
Erasmus
Social Democrats USA endorsed Nixon? — I was unable, by googling, to verify that statement. If there is any truth to the assertion, it would be a “fact” as meaningless as a “Harper’s Index” statistic.