DiRomualdo, hired by Borders in 1988, knew of the company from a BIS-client store in Toledo, where he had run food retailer Hickory Farms. It was only after seeing Borders' crowded, lively store in Indianapolis, however, that he became convinced of the chain's potential. "If they could have this kind of following here," he recalls telling himself, "you could have 500 of them." DiRomualdo was also impressed by Louis Borders' inventory system, which by then had incorporated artificial intelligence. Bugs in the program limited Borders growth in the early 1990s, DiRomualdo says, but now delivers as it should, keeping salespeople out front helping customers rather than in back rooms doing paperwork. Today Borders' inventory-control system is considered, according to Jim Milliot, business editor of the trade magazine Publishers Weekly, "the industry standard."
The Superstore Phenomenon
The current system, says Borders vice-president for marketing Dan Conetta, "mimics the thinking of a very good \o7 professional \f7 book buyer"--if the buyer knows, that is, the title, quantity and sales rate of the 125,000 titles found in the typical Borders store. The result, he says, is that "If someone shops a Borders constantly, the store begins to resemble the customer"--begins to reflect, in other words, the customer's tastes and tendencies. DiRomualdo puts it this way: "Stores in Miami and Anchorage will have radically different inventory, especially over time." Store management is likewise decentralized, though Borders does maintain central managerial philosophies, such as the belief that employees ("associates") should be well-educated; prospects must pass a test--in literature, music or computer topics--for the department in which they hope to work. "A huge assortment requires good people," says DiRomualdo. "When you've got a reputation for a great selection, people are going to ask you tough questions."
No, the book isn't dead, or even dying--as DiRomualdo points out, one of Borders' best-selling categories is computer books. Nonetheless, Borders is better prepared than most bookstores to ride out a decline in the sale of printed texts: Every new store carries many thousands of music, video and multimedia titles (the Westwood store is the first to have a full-fledged, 2,000-title multimedia section). If there's a book superstore shakeout on the horizon, as some industry observers predict, Borders isn't likely to be a casualty.
Borders' sales were up 85% overall in 1994, to $200 million, which tells you that print mavens appreciate the chain's approach to bookselling. (Barnes & Noble's 1994 sales gains were likewise healthy--up 21%, to more than $1.62 billion.)
For competitors, though, Borders' arrival in town is often a nightmare. The inventory control system allows Borders to keep its costs down, holding its return rate (booksellers are permitted, for a few months after publisher shipment, to return unsold books for credit) to about half the industry average, or under 10%; its policy of differentiating one store from another keeps Borders stores from seeming antiseptic, homogenized and out-of-place.
When competition from the Borders/B&N superstore juggernaut forced Chicago's venerable, home-grown bookstore chain, Kroch's & Brentano's, to close half its 20 outlets in 1993, one of its book-buyers complained that the superstores had "stolen or borrowed the whole concept of the independent bookstore." She was right, too--if you overlook the facts that K&B is itself a chain, that Borders also began life as an independent, and that its chain incarnation is an attempt to recreate that store's success on a mass scale. As Avin Mark Domnitz, president of the American Booksellers Assn., said last year, the chain superstores have simply been "mimicking the small independent bookstores, only doing it bigger and better."
