Given the litany of negative numbers in the rest of the article, it’s hard to believe that this will actually happen, but at least the guy’s got the right strategy.
What’s ironic is that Borders was, at one time, a world-class retailer, a pioneer in the use of information technology.
Ron Marshall acknowledged that Borders faces “lots of challenges,” but said that the company has the resources to become a world-class retailer. His vision for the chain is to return it to its roots–a chain “that caters to book lovers, where a customer will walk out smarter than when she walked in.”
via Despite Big Loss, Marshall Confident of Borders’s Future – 3/31/2009 2:23:00 PM – Publishers Weekly.
This anthem to positive thinking from the BGP LJ group site — a good place for “nontraditional” reporting on the travails of Ann Arbor’s own.
Borders group employees
So the question is as the Titanic goes down, who are we?
We aren’t Leo and Kate, that’s for sure, those are probably our customers, Leo dies, and leaves us, as he sinks in the icy void of ‘we don’t have it, and no we can’t order it in the store, and maybe you can get it from borders.com but we really can’t see anything about that it is a seperate business, I wish we could help you with it in the store, but it is down, or so slow as to be practically down from the perspective of the bookseller’.
Wow, this is horrible news for Borders shareholders. What a sad, desperate company it has become. Sell.
Borders Hopes for 8th Day Film Deal – 7/15/2008 12:48:00 PM – Publishers Weekly
[Borders pr] said CEO George Jones and executive v-p of merchandising and marketing Rob Gruen “are managing the film rights.” (Jones and Gruen both have backgrounds in retailing; Jones previously ran Warner Brothers studio stores, and Gruen worked at Target and at Warner Brothers.) The statement added that even with the potential film sale, Borders will continue to focus on its core book business and in executing its cash flow and expense reduction initiatives.
mediabistro.com: GalleyCat
Would Borders Merge With B&N?
What are we to make of the fact that the Pershing Square Capital Management hedge fund revealed in a recent SEC filing that it owns shares in both Borders and Barnes & Noble? David Polonitza of SeekingAlpha focuses on Pershing’s track record for shareholder activism to speculate (very wildly) on the possibilities of a merger between “the number #1 and #2 big box book stores in the country.” He explains the logic behind the hypothetical move: “There would be considerable cost savings in merging the two companies with respect to distribution, management, along with the increased purchasing power. Each company’s online presence is still not competitive and they might fare better combined…a much stronger competitor to the likes of Amazon than they are apart.”
From a cost-cutting corporate shark point of view, why not? The two companies have essentially duplicate infrastructures and there is no really significant differentiation in their value propositions. Why not put all the stores under a common management and get rid of half the infrastructure?
Just as long as it’s not the Borders half they get rid of … that would be a horrendous blow to Ann Arbor, already reeling from the loss of Pfizer.
Technorati Tags: Borders, Pfizer, Ann Arbor, BGP
Borders and Shading – Yahoo! News:
I feel a little sorry for bricks-and-mortar booksellers. People come in, thumb through the books, and then go home and order them on Amazon.com (Nasdaq: AMZN – News). Sure, a few of us will actually buy something at Borders (NYSE: BGP – News) once in a while, but in this Fool’s case, it’s usually a buy motivated by pity or guilt, and that’s not a firm foundation for growth.
It appears that I’m not the only one not buying a lot of books at Borders these days. Companywide sales rose less than 1% in the third quarter, and that growth came almost entirely from expansion, as same-store sales at Borders and Waldenbooks fell 0.2% and 5.2%, respectively, and overseas comps were down as well. It’s probably not surprising, then, that margins slipped and the company’s net loss grew.
Some of the underperformance was self-inflicted. The company has been going through a store-remodeling program, and sales suffer at the locations undergoing remodeling. With 12% of the U.S. store base being remodeled this quarter, it’s not hard to imagine a significant impact across the business. On a somewhat positive note, the company reports that newly remodeled stores post better comps — though it’s anybody’s guess how long that boost will last.
Though Borders has generally been a consistent free cash flow producer, that’s not going to be the case this year, with the remodeling program having inflated the capital expenditures figure. Again, only time will tell whether the money spent there will earn a compelling return on the investment.
This has been a tough year for the company and the stock, with estimates having been cut several times. The good news, such as it is, is that the valuation here isn’t very high, and there’s not that much debt. The company’s cash flow history probably makes it worth keeping an eye on for value investors, but there’s probably plenty of time to browse before buying.
An unduly negative appraisal IMHO. I remember when Borders was at $12, $13, $14 share during the Amazon boomlet. Their business has survived.
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