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