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Posted on Wed, Apr 6, 2011 : 2:24 p.m.

Borders' intent to relocate corporate headquarters shows company's fading Ann Arbor identity

By Nathan Bomey

Borders Group Inc.’s decision to exit its Ann Arbor headquarters and consider leaving the area altogether illuminates the gap that has opened up between the book store chain’s distinctly Ann Arbor identity and the business realities of a major corporation that’s fighting to stay afloat.

The company, launched 40 years ago by brothers Tom and Louis Borders as an 800-square-foot shop on South State Street, said this morning that it plans to move out of its headquarters on Phoenix Drive on Ann Arbor’s south side.

A Borders spokeswoman told the company is searching for new office space in the “metro Detroit” area, which, she said, could still include Ann Arbor.


Steve Pepple |

Nonetheless, the company’s connections to Ann Arbor have frayed as its corporate identity morphed from small-town, customer-service-driven bookshop to innovative national chain to behind-the-times global corporation.

Now, the company is navigating Chapter 11 bankruptcy court in hopes of identifying a profitable business model that would allow the company to continue operating.

But the need to cut costs has emerged as a top priority.

Michael Norris, a publishing industry analyst with Maryland-based Simba Information, said that sticking with Ann Arbor probably shouldn’t be Borders’ key objective.

“If you’re in bankruptcy, sometimes a company’s got to ask whether they can afford something intangible like an identity and decide whether maybe it’s better if they can afford to stay in business going forward,” Norris said.

Skip Simms, interim CEO of economic development group Ann Arbor SPARK, said he understands that Borders needs to make economically prudent decisions.

“If, in fact, they’re leaving, certainly it’s a loss to the community that we hate to see happen,” he said. “But if the early reports are true that at least they’re staying in the general area, they’re doing what they have to do to survive, which we are certainly supportive of.”

He added: “SPARK will be there to help them in any way we can.”

To be sure, Borders’ reputation in Ann Arbor has declined in recent years after rapid executive turnover, deteriorating customer service, successive rounds of corporate layoffs and the closure of the Arborland Center store on Washtenaw Avenue.

The company is believed to employ about 550 workers at its headquarters, down from about 1,800 at one point, though we don’t know for sure. Borders won’t say, and the company’s official CEO, tobacco executive Bennett LeBow, refuses to talk to the media.

So it should come as no surprise that the company might be willing to ditch its Ann Arbor headquarters to save a few dollars somewhere else.

“For me, the company really ceased to have an Ann Arbor identity when it was acquired by Kmart” in 1992, said David Dykhouse, a former manager of the Arborland store. “At that point, it had become a corporate entity.”

That’s not to say that Ann Arbor no longer cares about Borders. In fact, there are many book readers who prefer to shop there, if only because it’s still a local company and it provides jobs for local residents.

Even Karl Pohrt, who owned the shuttered Shaman Drum Bookshop on State Street near Borders’ flagship store on Liberty Street, said he hopes Borders survives.

“I’ve been really worried about the store on Liberty Street and how central that is for the health and vitality of downtown Ann Arbor,” Pohrt said. “I think that the loss of Borders, if they don’t weather this crisis, would be a real tragedy for the city and for State Street and also for the book business in general.”

Pohrt’s concerns stem from the declining book sales industry and the state of reading, in general. He said Borders’ decline “makes me sad" and he's disappointed to see the company requesting the bankruptcy court's permission to distribute executive bonuses that could be worth up to $8.3 million.

“I think it has to do with decisions at the level of executives. They’re the ones that were responsible. But it’s not only them, it’s the decline of the culture of books in the country,” Pohrt said.

He added: "Ann Arbor certainly has so many book lovers in this town that it was easy for there to be a number of bookshops here. But I’m not sure the material conditions or the economic conditions are such that you’d want to do that again. I think of somebody’s who’s young. Why would they want to enter this business?”

Contact's Nathan Bomey at (734) 623-2587 or You can also follow him on Twitter or subscribe to's newsletters.


Dr. I. Emsayin

Thu, Apr 7, 2011 : 2:43 p.m.

Borders has the best magazine selection in town; I go there for that. I used to shop at Border's for academic books but they stopped carrying those a long time ago. I do find stopping in there a downtown destination that I would miss were they to leave. I'd encourage Dawn Treader to get a few more chairs there!


Thu, Apr 7, 2011 : 12:40 p.m.

It was a good run, but like numerous other things (CB radio, muscle cars, bell bottom pants) it's time has come and gone.

Andy Piper

Thu, Apr 7, 2011 : 10:56 a.m.

I already shop for books at Amazon. When I go to Borders to buy a book, and they don't have it in stock, I go on my Iphone and order from Amazon on the spot, have it the next day by noon. Borders gave their online book business to Amazon years ago. These book superstores are mostly air and fluff with very few books. A book retailer could get the same thing done in 1/5th the space. It really gets back to poor leadership.


Thu, Apr 7, 2011 : 12:31 a.m.

Well, they will lose this loyal customer. Guess I'll be shopping


Thu, Apr 7, 2011 : 12:29 a.m.

I remember when the first Borders (and Barns & Noble) opened up in my hometown in the 1980s and, one by one, all of the smaller independent bookstores were run out of business. What goes around comes around.


Wed, Apr 6, 2011 : 10:23 p.m.

It's pretty sad. Borders, a local company that became huge through innovation, has been slain by a lack of innovation. It was Tom and Louis Borders book cataloging software that allowed it to grow exponentially and become acquired by K-Mart. Then Bob Di Romaldo coaxed K-Mart to let Borders go when K-Mart itself found itself in bankruptcy. Unfortunately, it would appear innovation is not self-perpetuating. Borders was late to the internet game, they got eaten by Amazon and even Barnes and Noble as Borders fumbled to figure out what the internet was. Anyone that says Borders was not very late in waking up to e-commerce, wasn't paying attention. That's the reason we're on the cusp of waving good-bye to Borders. ....a complete lack of vision by a company that was founded on incredible vision.

Macabre Sunset

Wed, Apr 6, 2011 : 7:21 p.m.

The company lost its Ann Arbor flavor when the Borders brothers got out. With loaded terms like "ditch Ann Arbor," shouldn't this story have a flag indicating it's an opinion piece? Anyway, with talk of income taxes and Ann Arbor's already high prices, I would have expected this move a while back. Makes sense when cutting costs is paramount.

Macabre Sunset

Thu, Apr 7, 2011 : 3:06 a.m.

Of course they care. The CEO is based at the headquarters, why would he voluntarily submit to another tax return? It would also be an impediment to recruiting or keeping top talent. This is exactly the reason why city income taxes end up raising a lot less money than projected.


Thu, Apr 7, 2011 : 1:17 a.m.

I very much doubt Detroit is even on their radar for a new HQ, and the only "suburbs" of Detroit that have income taxes are the two cities enveloped by Detroit (which are even less likely options for the new HQ), Port Huron and Flint (which aren't exactly suburbs of Detroit, unless you consider Ann Arbor to be a Detroit suburb and, again, are probably not viable options anyway.) There are plenty of places in Metro-Detroit without income taxes and where you can buy property for a song, they'd be foolish not to consider them if they want to stay in Michigan.


Thu, Apr 7, 2011 : 12:30 a.m.

News Flash: One city Borders is considering (Detroit) has a city income tax, as do many suburbs of Detroit.


Wed, Apr 6, 2011 : 11:14 p.m.

Whether today or years ago, Borders couldn't care less about the possibility of city income taxes. Jut not on their corporate radar.

Macabre Sunset

Wed, Apr 6, 2011 : 8:03 p.m.

Where did I claim that the failure of Borders was due to taxes in Ann Arbor? Good straw-man for the reading impaired. Borders failed because it made reckless decisions during a natural downturn in its primary business. Moving the headquarters would save money, which is necessary during Chapter 11.

John B.

Wed, Apr 6, 2011 : 7:44 p.m.

Thanks, timjbd!


Wed, Apr 6, 2011 : 7:26 p.m.

Yes, The fact that Ann Arbor is so expensive is probably why they failed and are now leaving. It's also why all those other big companies have their headquarters in Manhattan. Or Tokyo. Or Seoul. Or London. Because Ann Arbor is too expensive.


Wed, Apr 6, 2011 : 7:15 p.m.

You have to wonder if any of these big book stores are going to survive ( or at least at the retail store level). It's much easier to buy online at Amazon.

Christopher LeClair

Wed, Apr 6, 2011 : 7:10 p.m.

So much for supporting this "local company" Just another sign of the times.