So Borders is bankrupt. No surprise, no one is saying, “oh, I didn't see it coming,” and no one is really saying much of anything. We knew thugs weren't good, we suspected the worst, and were pretty much getting it. There's just no surprise, just a kind of sadness.
So I'm asking myself this; what happens next to Borders?
I can't say for sure I'm not a prophet, which our yearly predictions clearly prove in spades. But that doesn't stop me from speculating on the future, with the vague hope that I'll get it right. In this case I'm not going to so much prophecy, but discuss what I think is an ideal situation for Borders.
It's what I call Best BorderStop.
Yes, you can pre-much guess what I'm aiming at; I think a merger/alliance/acquisition of Borders, Best Buy, and GameStop is ideal. Okay, not necessarily deal, but more viable than many other alternatives, good for the companies involved, and good for their survival.
Without going into the idea of who buys what sells what, and so on, the advantages I see for each company is:
Best Buy: Best Buy is doing pretty well, but they do have a few identity issues: they're split between gadgets, big-box hardware, computers, assorted media devices, and media that's often used as a loss–leader. They have no competition per se, but they do have competition in their individual spaces, and you know how that can go. They can either specialize, or diversify–and I see absorbing Borders is a way for them to diversify. Think of them as, in a way, becoming a physical–store Amazon.
GameStop: GameStop is actually doing pretty well these days, considering how crazy the gaming industry is, how unpredictable the future is, and how much money is involved. They're thinking ahead, they're building forward-thinking stores; they're trying to make their spots a destination. However we know that gaming is going to keep evolving towards downloadable content, indie games, and in many ways is moving onto tablets, at least in the mobile space. Combining forces with a larger company preserves GameStops interest, knowledge, and physical footprint.
Borders: Let's face it, they're in trouble. The writing is on the wall, they got behind, and their competitors are either strongly established in the physical space ( Barnes & Noble) or the virtual space (Amazon). But they've got infrastructure, reputation, and a passionate audience. A merger/acquisition of some kind could preserve what they do, by becoming part of an entity with larger reach and stock.
What would “Best BorderStop” be like? I don't see it being like any one thing; instead I see it as a chain of stores that are not all alike, necessarily, but instead target specific audiences with electronics and media.
The big Best Buy stores could focus on the big hardware big sales, technical support, and being true technology centers. The GameStops and Borders stores could become “destinations,” where people go for media, camaraderie, games, and so forth. Essentially Best BorderStop would be a mixture of large hardware stores, and smaller media–oriented centers with awesome coffee shops.
This approach would allow resulting company to leverage the footprint of all stores involved, build good relations by having friendly, media–oriented destinations people go and hang out in, and also allow them to evaluate their results. If a given series of store efforts don't work, the store can be converted, sold off, or repurposed. The sheer physical footprint alone would give the resulting entity a chance to experiment.
The combined company would also allow for some interesting experimentation within stores. Imagine a media–focused branch that also sells Kindles, iPads (notice the Apple presence inside a Best Buy?), and so on. This experimentation would allow the resulting entity to further refine its focus on individual stores and as a company as a whole. Imagine the adaptability, say, to phase in given mobile technologies with game packages, as game distribution changes, or to pick up a cheap DVD player right in the DVD section of the “media store.”
Is it perfect? No, it's not. But it might give three companies a chance to build a future – when two of them face exceptional challenges.