Borders UK has gone into administration, putting 1,150 jobs at risk.
The British chain of shops, which operates as a separate company from the US Borders chain, recently stopped taking new book orders online. It had been struggling in recent months due to increased pressure from internet competition and supermarkets as well as a deteriorating retail market.
Borders has 45 UK stores, thirty six of which trade as Borders and nine as Books Etc.
Last year, Borders ended a seven year agreement with Amazon, under which the e-tailer provided Borders’ website. It then launched its own e-commerce site.
Borders had had an early online site before it moved under Amazon’s umbrella, but the costs of running it were higher than the revenue it generated.
In 2008, Kevin Ertell, Borders’ senior vice president of e-business, said the new site’s development process was chiefly about bringing together the in-store experience of buying books and the online experience of extensive search capabilities, “in a way that leverages the strengths of each” but is “greater than the sum of its parts”.
One example of this blended strategy was called the Magic Shelf. The feature used Flash video technology to recreate a virtual bookshelf.
In 2008 Borders spent heavily on building the site’s functionality and the systems that wrapped around it: replenishment, supply chain, customer relationship management. It used a mixture of off-the-shelf systems and bespoke code.
The company said at the time that its lack of legacy e-commerce systems meant it could move straight to the latest technology.
But observers noted that rival Amazon had learnt a great deal in its early days from providing the backbone to Borders’ online operation.
When Borders’ own e-commerce site launched in 2008, industry analysts raised concerns over the site’s speed, and over Borders’ decision to allow online customers to reserve books for collection – books they might never collect in reality.
The joint administrators of Borders UK are currently working with the company's management in order to sell the business as a going concern.