Borders Bankruptcy leaves Calif. town holding the lease

Pico Rivera, California, is a symbol of much of what went with Borders. It's a suburb of LA, and it has a population of around 65 thousand.Eight years ago this small town convinced Borders to open a store in its shopping center by making a simple promise. The town would pay about a third of Borders' rent for the entirety of the 15 year lease. That's $10 thousand a month the town was paying out of a total monthly rent of around $33 thousand.

Pico Rivera had to subsidize the rent because it wasn't big enough for the Borders store to be profitable, which would explain why Borders decided to close the Pico Rivera store in the first round of 200 stores. Depending on the exact terms of the lease, the town could be stuck with paying the full rent for the next 6+ years.

The town wanted a bookstore, and that's understandable. But you have to wonder WTH Borders were thinking. For 8 years Borders kept a store in a market that couldn't support it, and they signed a 15 year lease in market that couldn't support the store.

One hears stories about how Borders dug their own grave, but the thorough they it did is still breathtaking.

via Whittier Daily News

image by Thomas Hawk

About Nate Hoffelder (11579 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

1 Comment on Borders Bankruptcy leaves Calif. town holding the lease

  1. On the face of it, the deal is absurd on both ends.
    However, allowing that we might be looking at an upscale community with a lot of afluent residents, I looked up the demographics in wikipedia…
    http://en.wikipedia.org/wiki/Pico_Rivera,_California
    It turns out that this town that is now on the hook for $2.5 million has a per-capita income of $13,000 (about a third of the state average) and has 16% of the under-18 population living below the poverty line. 🙁
    To me it looks more like a community that should be putting its money into libraries, not subsidizing a (badly-run) mega-retailer.
    But then, considering other stories floating around about how California towns are run…

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