Why Did Waldenbooks Go Out of Business?


Quick Answer

Waldenbooks, part of the Borders group, went out of business in 2011 when the parent corporation was unable to find a buyer to purchase the company out of bankruptcy. This was largely due to expanding too quickly in the late 1990s and failing to take advantage of electronic commerce.

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Full Answer

Kmart purchased the Waldenbooks chain in 1984, and when the company also took over the Borders franchise, it planned to consolidate the two brands into a single, profitable bookselling division. Unfortunately, many of the experienced Borders executives left after the merger, leaving the combined brand struggling. In the late 1990s, the company took on larger and larger amounts of debt in an effort to expand the Borders and Waldenbooks brands, opening up too many locations for the market to support. The company also invested heavily in expanding music sales at a time when physical music sales began to decline sharply.

Notably, Waldenbooks and Borders misread the potential of online commerce. In the late 1990s, the company outsourced its online sales to Amazon, inadvertently driving customers to a company that eventually became its most powerful competitor. In addition, the company failed to capitalize on the rise of the e-book market, and opened its first e-book store in 2010, many years after rivals Amazon and Barnes and Noble had begun to dominate the market.

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