Barnes & Noble buys Borders' IP
While millions of customers will miss Borders, its erstwhile competitors entered into a buying frenzy to snatch up the company’s assets. But perhaps the most sought-after item on the auction block wasn’t anything tangible. It was the defunct big-box book retailer's intellectual property, purchased by Barnes & Noble for $13.9 million.
Hilco Streambank, the intellectual property wing of Hilco Trading, told the "Detroit Free Press" that over 50 rounds of bidding went on before winners emerged. Malaysian company Berjaya Books was another winning bidding. However, a certain bittersweet irony hung over the sales as Borders' biggest competitor, Barnes & Noble, made off with the lion’s share of the company’s IP.
The sale of Borders' intellectual property to its chief competitor will likely go down in history as a turning point in American and international business. Barnes & Noble was uninterested in the physical stock and real estate of Borders. Instead, Barnes & Noble was interested only in the more intangible intellectual property of Borders. This could be a sea change in American business as big as a McDonald’s in Leningrad or the first Mexican Ford plant.
In many ways, the purchase is not surprising. What does Borders have that Barnes & Noble doesn’t? A brand and a customer base. Barnes & Noble never expressed any interest in purchasing the brand. Having access to the customer list, however, allows Barnes & Noble to access customers in areas where it already has locations. Even if Barnes does not have a location close to the customer, the customers can purchase books at Barnes & Noble’s online store. Such property has a far greater value and lower maintenance cost than a large stock of books.
In purchasing the company’s IP, Barnes & Noble achieved one of the same objectives as purchasing the brand outright. It will be very hard, if not impossible, for a competitor to emerge using the Borders brand, domestically anyway. On the international market, several companies purchased Borders trademarks for use in New Zealand, Australia, Malaysia, Singapore and the UAE.