Borders opens second ‘concept store'
Chain looks to broader digital selection to boost sales
By Danny King -- Video Business, 7/15/2008
JULY 15 | Borders this week will open its second so-called “concept store” designed to revive flagging sales by broadening its selection of digital items and Blu-ray discs.
The No. 2 bookstore chain behind Barnes & Noble will open a 25,000-square-foot store in Wareham, Mass., about 50 miles southeast of Boston, this week. Like Borders’ first concept store, opened in Ann Arbor, Mich., in February, the new store’s interior will be divided into five “destinations”—travel, cooking, wellness, graphic novels and children’s—and will include a digital center, all designed to boost sales of its fast-growing DVD category.
In recent quarters, Borders revenue has suffered as online retailers such as Amazon.com boosted media sales while U.S. consumers cut back music purchases. The company, which in March hired investment bankers J.P. Morgan and Merrill Lynch to explore a possible sale, said in May that its fiscal first-quarter loss was wider than analysts expected, as same-store sales fell 4.1%.
“We’ve brought a fresh new look and an exciting interactive dimension to the store, with a digital center where customers can do everything from mix and make their own custom CDs, download books and music, publish their own books and create photo books,” Borders CEO George Jones said in a statement last week. The Ann Arbor store “has been a huge success, and customers love it.”
Like movie studios and other media retailers, Borders is counting on Sony’s Blu-ray to reverse last year’s decline in DVD rentals and sales. In May, Borders substantially broadened its Blu-ray inventory and added Blu-ray displays near store entrances.
Borders' Ann Arbor concept store is 29,000 square feet. The company hasn’t released sales figures for that store.
Building costs for the concept stores are “somewhat higher” than the typical store in the 1,100-unit chain, said company spokeswoman Kolleen O’Meara, who declined to be more specific because such figures will change as the new design is applied to existing stores.
