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An Opportunity for Borderlands to Stay Open

As a result of the ideas suggested at the meeting we hosted last Thursday, and the emails that have been pouring in, the staff and I have come up with a plan to keep Borderlands open.  Below you'll find the details of it and following that, you'll find my reasoning behind it and some Q&A.  If it is to succeed, we will need your support -- not just right now, but every year moving forwards.  So, if you want Borderlands to continue, it is in your hands.

Prior to the events of the last two weeks, I would never have imagined that something like what follows would ever be possible.  The outpouring of affection and emotion that started the moment we announced that we were closing has changed forever the way the I and the rest of the staff see Borderlands.  This place has always meant the world to us -- that's why we work here -- but we never imagined that it meant so much to so many people.  Win or lose, open or close, we are all more grateful that we can express for your kind words, sincere compliments, and the belief that what we do matters.

The Short Version

Starting immediately we will be offering paid sponsorships of the store.  Each sponsorship will cost $100 for the year and will need to be renewed every year.  If we get 300 sponsors before March 31st, we will stay open for the remainder of 2015.

The Plan

Our goal is to gather enough paid sponsors to cover the projected short-fall in income that will be the result of the minimum wage increase in San Francisco.  At the beginning of next year we will again solicit sponsors.  If next year we again reach our goal by March 31st, we will remain open through 2016.  This process will continue each year until we close, either because of a lack of sponsorship or for other reasons.

We are still considering benefits we can offer our sponsors but, at this point, a preliminary list is:

- Reserved seating at author events
- The ability to rent the cafe and / or bookstore outside of normal operating hours for private events at our cost (which is roughly $25 to $100 per hour)
- Invitations to a quarterly gathering at the cafe where you can socialize with other sponsors, members of Borderlands' staff and occasional special guests
- Access to preview sales of rare and collectable books whenever we make a large acquisition
- The opportunity to purchase occasional items produced by us for sponsors and not offered to the general public (such as limited Ripley prints, chapbooks, and so forth)
- A selection of unique apparel and accessories showing your status as a sponsor and not available to the general public
- Invitations to sponsor-only events, like small gatherings with authors, exclusive writing workshops, and more

A sponsorship will cost $100 for this year.  That price may increase or decrease in subsequent years, depending on our finances.  The minimum number of sponsors each year will be 300, but we will accept any number of people who would like to participate.  Each participant will be given a sponsor number, based on the exact time and date that they first started sponsoring Borderlands.

Though we considered partnering with an outside company to collect the payments, we concluded that we're sort of old-fashioned and value our direct connection with our customers.  So, payments may be made in person at the store, by phone with a credit card or by mail via check (note, for check payments, sponsorship start date and time will be 12:01 A.M. on the day the envelope was postmarked).

To pay in person, just come into the store anytime between noon and eight and inquire at the counter.  To pay by credit card, please call 415 824-8203 or toll-free at 888 893-4008 during the same hours (please be patient if you get a busy signal as we only have two phone lines).  To pay by check, please send the check to - Borderlands Books, Sponsorships, 866 Valencia St.  SF  CA 94110 and make sure to include your phone number, email address, and mailing address.

The Reasoning

As I've said elsewhere, I had been opposed to the idea of sponsorships or selling memberships for two reasons.  First, I didn't think that it was right for a for-profit business to ask for a hand-out to continue operating.  Second, based on what I have seen happen to other bookstores, I didn't believe that the sort of support we needed was something that would be sustainable.

However, comments that were made at our public meeting last Thursday made me question my second assumption.  There were so many people who were so committed to the store, and so willing to give us their money, just so we would continue to exist, that I started to wonder if there might be enough support for the long haul.  One suggestion that stuck with me in particular came from someone I'm going to refer to as "Mr. Barnum" (I know his name but I don't want to spread it all over the internet without his permission).  His suggestion was that we could sell a membership card that gave the holder the right to pay 10% over cover price for their purchase.  Not only did those attending the meeting think that was an amusing and clever idea, but two customers approached me later that weekend and seriously affirmed their support for it.

The other thing that was made clear to me at the meeting was that people really valued the social aspect of Borderlands, as well as valuing our recommendations, curation, and suggestions.  Of course, I value it too, as do all our staff, but I didn't realize just how much it meant to other people.  At the meeting one person commented that they were relatively new to San Francisco and that, during the course of the meeting, they had met a couple of people with common interests.  They said that a place that would allow such connections was truly important and valuable.

I spent the next few days thinking about all that.  I still wasn't convinced that there was enough support or, more accurately I thought that, though there was enough support right now, I didn't believe that the support would last.  To allow Borderlands to continue, it's not just a matter of one big burst of support and a pile of cash.  Our income from books will not be enough to keep us operating as the minimum wage goes up.  Without some other income, we will be operating at a loss, possibly as soon as the middle of this year.  So, any support must be long-term and constant.  Right now people are emotionally involved and motivated to help but, three years from now, that will have worn off.

But, I thought that there was enough interest that it would be worth giving it a try.  I had two remaining problems, however.  First, I needed to figure out how to make that support something other than a hand-out from our customers.  Second, I needed a way to structure whatever we did so that I would clearly know if the support didn't exist with enough warning that I could shut down the business in an orderly and financially sound way.  Unlike a simpler business, a bookstore has a ton of money invested in inventory.  If one is going to close, something needs to happen to that inventory and there is nothing that can be done quickly while still being financially wise.

As you've seen from the list of benefits above, once Jude and I and the rest of the crew started thinking about what sort of things we could do for our sponsors that wouldn't cost us money (since that would be defeating the purpose of the sponsorship) we came up with a solid list quite quickly.  And, I'm sure that we'll come up with more stuff as we go along (especially once we have sponsors and get their feedback on what they would like).  That solved the question of how to make sponsorship something other than a hand-out.

The question that remained was how to structure it so that I would have enough warning that the willingness to sponsor the shop was running out.  Several people that I talked to suggested charging a monthly amount, but that's a problem since the income could vary widely from month to month.  But, once I considered it as a yearly fee and then added the idea that there was a limited window each year for us to make our goal, that fixed the problem and will allow us to predict a year in advance what we will be doing.

After presenting the whole idea to all the staff, it was generally agreed that it might be a workable, long-term solution to our problem without compromising our values or our vision of what Borderlands was all about.

Q&A

Q:  You've said that your shortfall only reaches $25,000 per year in 2018.  Why are you asking for $30,000 now?

A:  Two reasons.  First, Borderlands has been operating without any cash reserves since 2010.  That is not a wise way to run a business over the long term.  So, the extra money we raise now will create that reserve.  Second, if people are not willing to put up that amount this year, when emotions are high, they certainly won't be willing to do it in three years when we'll really need it.  So, I'm testing the level of support now (and next year) to see if it really is viable.

Q:  If you don't reach 300 sponsors by March 31st, will you still close?

A:  Yes.  And, while we're waiting to see if enough people will sponsor the store, we're still going to be moving forward with closing (however, I will probably wait to sell any fixtures and bookshelves until we see how it plays out).

Q:  If I sponsor and you don't reach 300, will I get my money back?

A:  You'll get most of the money back.  Trying this is not without costs.  There are both simple cash expenses (specifically credit card processing fees) and also less tangible costs like the time on the part of the staff to collect information, answer questions, do the paperwork and information processing, and so forth.  Plus, I'm going to wait to sell most of the fixtures until after we see what happens.  That will mean much more work for me after March 31st if we do close and, probably, lower sale prices for the shelves if this doesn't pan out.

So, if we don't reach 300 sponsors, we will be refunding $75 to each person who did sponsor.

Q:  Can people buy sponsorships after March 31st?

A:  Sponsorships will be available year round but the most important time to get them will be before March 31st each year.

Q:  Are you guaranteeing that you'll stay open for the rest of 2015?

A:  It's impossible to guarantee something like that.  We could have a huge 'quake or a fire.  Jude and I could both get hit by a bus (the store would continue to operate if it was just one of us killed, but both?  Probably not, although there are plans in place.)  However, barring surprises, we'll do our damnedest to stay open.  And the same goes for the following years.

Q:  If you get enough sponsors, how long will it take to get the store "back to normal"?

A:  Unless we take this chance to do some refurbishing of the place, it will take about two to three weeks to get our stock back up to "normal" levels.  It will take a month or two to get our events schedule back to normal, since we haven't scheduled anything beyond the end of March.  But, overall, it will be a very fast process.  I'd say that the place will look normal to the average customer within a week or two after we change course.

Q:  Have you considered a tiered structure of sponsors wherein higher fees give additional benefits?

A:  Yes, and so far we've decided against it.  We're a pretty egalitarian sort of operation so I think that it's better to have a single level of sponsorship and to treat all our sponsors the same.  Though I will say that the first 300 original sponsors will be pretty special to us since they will truly be the people who saved Borderlands.

Q:  Can I buy more than one sponsorship?

A:  Each person can only hold one sponsorship, but you're welcome to buy sponsorships for friends or family.  Also, sponsors must be natural persons -- businesses and organizations cannot be sponsors.

Q:  Is this the only action you're planning on taking?

A:  No.  This change addresses the projected problem, but there were several great ideas that were suggested that I'm going to pursue.  The most notable ones are: offering a subscription program whereby we send subscribers one (or more) books per month; reaching out to local companies to see if they would be interested in hosting Google-style book talks; investigating the possibilities of starting a non-profit organization to help support either Borderlands specifically or San Francisco bookstores in general; and pursuing the possibility of using the local political process to address some of the challenges facing smaller, local retailers.

Q:  What about the hooded sweatshirt that I just bought that says "1997-2015"?  If this works, that'll be wrong and inaccurate.

A:  Very true.  But what a cool souvenir of the time that Borderlands _almost_ closed!  If you don't want it, perhaps you could sell in on Ebay at a profit.  Hell, I might buy it from you.  But, if I were you, I'd hold onto it -- it may be much prized and admired in a few years.

In Closing

I'm sorry if the tone of this note seems dispassionate.  Remember, while I was completely willing to have my mind changed by the pubic meeting, I really wasn't anticipating any workable solution to come up.  I apologize for the whiplash that you may be experiencing right about now -- everyone at Borderlands is feeling it too.  This idea went from an idle conversation to a plan in the span of 72 hours.  In fact, as I write this it is 4:36 P.M. and it will be posted on our blog at six.

The rest of the staff and I are all kind of exhausted and a bit overwhelmed from the last two weeks, and, while we're feeling quite hopeful about this as a possible solution, we don't want to get our hopes too high.  I think the best term for how we're feeling is "cautiously optimistic".  So please forgive me if this note seems a bit stilted.  I truly hope that this works out but I'm afraid that it won't.  And, if I'm to be honest, I'm also a tiny bit afraid of the work to come if this does succeed.

But, however this comes out, thank you for your support and your passion for Borderlands over the last 18 years.  We'd dearly love to keep doing this and we'd love to have all of you along for the ride -- but if it doesn't work, that changes nothing about the wonderful community that we have all created around and within the store, and the amazing experiences that have been the result.

Borderlands is Closing (this section has been retained for reference)

In 18 years of business, Borderlands has faced a number of challenges.  The first and clearest was in 2000, when our landlord increased our rent by 100% and we had to move to our current location on Valencia Street.  All of the subsequent ones have been less clear-cut but more difficult.  The steady movement towards online shopping, mostly with Amazon, has taken a steady toll on bookstores throughout the world and Borderlands was no exception.  After that and related to it, has been the shift towards ebooks and electronic reading devices.  And finally the Great Recession of 2009 hit us very hard, especially since we had just opened a new aspect to the business in the form of our cafe.

But, through all those challenges, we've managed to find a way forward and 2014 was the best year we've ever had.  The credit for that achievement goes to the fine and extraordinary group of people who have come together to work here.  Their hard work, combined with the flawless execution and attention to detail provided by Jude Feldman, Borderlands' General Manager, is the reason we've succeeded for these past 18 years.

Throughout the years we've managed to plan for the problems that we could predict and, when we couldn't plan for them, we've just worked our asses off to get through.  Overall, Borderlands has managed to defeat every problem that has come our way.  At the beginning of 2014, the future of the business looked, if not rosy, at least stable and very positive.  We were not in debt, sales were meeting expenses and even allowing a small profit, and, perhaps most importantly, the staff and procedures at both the bookstore and the cafe were well established and working smoothly.

So it fills us with sorrow and horror to say that we will be closing very soon.

In November, San Francisco voters overwhelmingly passed a measure that will increase the minimum wage within the city to $15 per hour by 2018.  Although all of us at Borderlands support the concept of a living wage in principal and we believe that it's possible that the new law will be good for San Francisco -- Borderlands Books as it exists is not a financially viable business if subject to that minimum wage.  Consequently we will be closing our doors no later than March 31st.

Many businesses can make adjustments to allow for increased wages.  The cafe side of Borderlands, for example, should have no difficulty at all.  Viability is simply a matter of increasing prices.  And, since all the other cafes in the city will be under the same pressure, all the prices will float upwards.  But books are a special case because the price is set by the publisher and printed on the book.  Furthermore, for years part of the challenge for brick-and-mortar bookstores is that companies like Amazon.com have made it difficult to get people to pay retail prices.  So it is inconceivable to adjust our prices upwards to cover increased wages.

The change in minimum wage will mean our payroll will increase roughly 39%.  That increase will in turn bring up our total operating expenses by 18%.  To make up for that expense, we would need to increase our sales by a minimum of 20%.  We do not believe that is a realistic possibility for a bookstore in San Francisco at this time.

The other obvious alternative to increasing sales would be to decrease expenses.  The only way to accomplish the amount of savings needed would be to reduce our staff to: the current management (Alan Beatts and Jude Feldman), and one other part-time employee.  Alan would need to take over most of Jude's administrative responsibilities and Jude would work the counter five to six days per week.  Taking all those steps would allow management to increase their work hours by 50-75% while continuing to make roughly the same modest amount that they make now (by way of example, Alan's salary was $28,000 last year).  That's not an option for obvious reasons and for at least one less obvious one -- at the planned minimum wage in 2018, either of them would earn more than their current salary working only 40 hours per week at a much less demanding job that paid minimum wage.

Although the major effects of the increasing minimum wage won't be felt for a while, we've chosen to close now instead of waiting for two reasons.  First, the minimum wage has already increased from $10.74 per hour to $11.05 (as of January 1st) and it will increase again on May 1st to $12.25.  Continuing to pay the higher wage without any corresponding increase in income will expend the store's cash assets.  In essence, the store will have less money (or inventory) six months from now, so closing sooner rather than later makes better business sense.  But more importantly, keeping up our morale and continuing to serve our customers while knowing that we are going to close has been very painful for all of us over the past three months.  Continuing to do so for even longer would be horrible.  Far better to close at a time of our choosing, keep everyone's sorrow to a minimum, and then get on with our lives.

Some of you may be wondering, what can I do to help?  Honestly, the best thing that you can do for us is -- come in and buy books!  We've got an awful lot of damn good ones and we'd love to see every single one go to someone who appreciates it before we close.  We're also going to be selling all our shelves and other fixtures.  It would make us very happy to know that our hand-built shelves were going to sit in the living room of someone who was a customer of ours and who appreciates their history.  And finally, if you're looking for a way to remember Borderlands (and you already have enough shelves and books -- crazy though that idea is) -- we're having hooded sweatshirts made with our logo and "1997 - 2015" on them. Once we're closed, there'll never be another place to get them again. We’ll have those in by the middle of February.

But, more importantly than coming in and buying stuff, please come in and say, "Hi".  The best thing about this business has been our customers and we're going to miss you all (well, most of you at least <grin>).  But please do be considerate of us; we all understand that finding that we're closing may be sad and upsetting but remember -- it's even harder for us. Borderlands was our livelihood, our pride & joy, and, for many of us, it was a big part of what defined us.  Although we understand your feeling of loss, it is dwarfed by what we are feeling. So come in, give us your best wishes, and try to be cheerful.  Everything changes and everything ends.  We did a hell of a job for a long time and now it's time for us to do something else. 

Some of you reading this probably have questions popping into your minds -- Is there a way to keep Borderlands open?  What alternatives have you considered?  What about moving out of SF?  What is going to happen to the cafe?  Is the business for sale?  And so on.  Before asking us your questions, please wait for a week.  We'll be sending out and posting updates frequently at our blog over the next week or so and those updates will probably answer most of your questions.  We will also be holding a public meeting in the cafe at seven P. M. on Thursday, February 12th. We'll be on hand to answer questions and moderate a discussion about alternatives to closing the store.  Although we do not believe that any viable alternative exists, we also think that we have a very smart and imaginative group of customers.  It is not impossible that we've missed a potential solution, and so we want an opportunity to hear your thoughts.

Thank you all for your support, business, and friendship over these last 18 years.  This has been the best job that any of us has ever had and we're very grateful to you for giving us the chance to do it.

If you would like to learn more about the store, please read our Mission Statement here.  If you would like to search our inventory, and/or order a book on-line, click here.

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