Following the creditors meeting in Melbourne for the Red Retail Group that owns Angus and Robertson and Borders I questioned how book stores would survive in 2011. It was clear that quality book stores would survive for a very long time to come. What won't survive are book stores who think they are supermarkets or department stores selling to achieve a margin rather than a product that many customers love.
The administrators were quick to remind us that they believe the business is sustainable if they can quickly fix a few problems - ie the non profitable stores particularly those that have both Borders and A&R in the same centre. They know very quickly which stores had to close.
37 are now closing. Here is the big question - what will the publishers get at the end of the day when they are owed millions for their books? If the owners of the business offer x cents in the dollars will the publishers supply in the future? What would be the incentive for the publishers to supply in the future?
It may be that after the closure of these stores the business will be handed back to the owners and the publsihers will get all of their money in time.
Let's hope what ever happens the next CEO knows how to run a book store.