I wasn't sure what to feel when I saw this in the NYT Dealbook. I agree with grumpyoldlady who said that Borders has gone downhill since they went national. Of course, I haven't been in the Ann Arbor store but when it wasn't quite as ubiquitous I thought it was a good bookstore. These days the shelves seem bare, there are more trinkets and toys and candy than a books (just a slight exaggeration) and the selection isn't as good. Most of the time I use it for browsing and if I like it I may buy it on Amazon. Other times I use Borders coupons which works out better than Amazon discounts.
What other "independent" bookstores are there left? I have been to some of these (except for Strand and Powells and that was almost 15 years ago):
5. Elliot Bay Books
6. Politics & Prose
Can they compete with the discounts offered by Borders, B&N and Amazon? I don't know the answer to that one except to note that when I used to work at a bookstore the cost of books to the bookseller is usually 60% of the cover price. Sometimes the discounts are deeper but that depends on the amount ordered. A really well run store can work with a 40% margin but if they start discounting all the books as Amazon does (well perhaps not all books, but most) then the margins become really slim and the costs for a bricks and mortar can really cut into the profits.
I suppose that's why most bookstores sell coffee. You can sit and read a book for free and end up spending more on coffee than if you bought the book and took it home to read.
Mixing new book sales with used book sales. I don't really know much about this except that used book seem really hard to handle in terms of having to separate the inventory. The used book store that I sometimes go to Second Story Books doesn't have a way to look up books (except for its more expensive and rare books) so I end up browsing which I've forgotten how much fun it can be. It's all about time these days.
In the end its time/convenience and price for me. It also seemed to me that once they decided to go public they were doomed to fail. Later on they expanded by buying up Waldenbooks (probably just to satisfy some kind of earnings growth estimate) and it felt like they were just getting desparate.