News

Borders hits the Web to boost sales

Alejandro Bodipo-Memba
Detroit Free Press (MCT)

DETROIT - Borders Group Inc. is planning for a brighter future with an emphasis on new online products and a refocused effort on attracting new customers, despite weak sales in 2006, slipping margins and increased competition.

The Ann Arbor, Mich.-based book retailer said Thursday it lost $73.6 million, or $1.25 a share, for the three-month period ended Feb. 3, compared with earnings of $119.1 million, or $1.78 during the same period a year ago. The company also said sales for the fourth quarter were $1.5 billion, compared with revenue of $1.47 billion in the year-earlier period.

For the year, Borders officials recorded a loss of $151.3 million, compared to net income of $101 million in 2005. Excluding non-operating charges, income for 2006 was $24.3 million, vs. $112 million in the previous year.

"Clearly, our 2006 results were disappointing, as our company and the industry as a whole continued to face a challenging environment," said Borders Group CEO George Jones. "This performance is not indicative of this company's many strengths, and it's not where Borders Group is headed in the long run."

In response to the poor financial performance, the company has developed a strategic plan to generate "long-term value" for shareholders.

Borders will look for alternatives to improve its performance including the possibility of selling some of its overseas retail assets, as well as some of its Waldenbooks business domestically. Officials said they hope to reduce the number of Waldenbooks stores - smaller establishments usually found in large shopping malls - from 564 to about 300 by the end of 2008.

The industry's second-largest book retailer has 1,200 Borders and Waldenbooks stores around the world.

"Our company's performance has fallen short in an industry that is increasingly competitive, technology driven and price sensitive," said Jones. "We recognize the urgent need to go on the offensive and drive significant change."

He added that layoffs are not a part of the strategy.

Borders Group, which has about 150,000 titles in its stores, claims a 13 percent share of the retail book-selling market.

Increased competition from retailers such as Barnes & Noble, Amazon.com and Costco Wholesale Corp. has forced the Michigan firm's hand.

Company officials said they have hired Merrill Lynch & Co. to be an adviser on the possible sale of some of its 41 British stores and KPMG was contracted to advise on the disposal of the business units in Australia and New Zealand.

"This is a company that has been losing ground and market share for several years," Jones said. "Its focus previously was to cut costs. But we're taking a different strategy, and we're going to drive sales."

To that end, Borders plans on unveiling a new-and-improved Borders.com Web site in 2008 to refocus brand recognition and enhance customers' abilities to purchase a wide variety of books, music and digital material from Borders. The move would end a relationship Borders has had with Amazon.com since 2001.

Another vehicle to try to recapture market-share is to leverage the company's 17 million-member Borders Rewards program and transform it into a profit-making segment of the business.

"This database will allow us to deploy the Rewards Program as a revenue-generating vehicle," Jones said. "Our mission is to make Borders a headquarters for knowledge and entertainment, and we believe our Rewards Program gives us a compelling opportunity to achieve that at our superstores."

Jones, who joined Borders in July, previously served as president and CEO of the Saks Department Store Group. Prior to that, he held high-level executive positions at Warner Bros. and Target Corp.

The high-energy chief executive plans to make e-commerce and the use of digital products at Borders a key element in the future.

Borders recently signed an agreement with Grammy Award-winning songwriter and singer John Legend to exclusively publish and offer a book on the artist's life to be released in July. The book, which will contain a foreword written by Legend, will only be available at Borders.

The company also will publish and release a book by first-time novelist Nick Santora, an award-winning television writer and producer for shows like "Prison Break," "Law and Order" and "The Sopranos."

"No one has really done something like this before," said Jones. "This is a big avenue for us."

Company officials also are looking at possibly publishing unsigned authors from within their ranks of 35,000 employees, or even from its customer base.

Borders stock fell 73 cents to close at $20.70 on the New York Stock Exchange Thursday.


Music

Books

Film

Recent
Books

'World War 3 Illustrated #51: The World We Are Fighting For'

World War 3 Illustrated #51 displays an eclectic range of artists united in their call to save democracy from rising fascism.

Music

Tiphanie Doucet's "You and I" Is an Exercise in Pastoral Poignancy (premiere)

French singer-songwriter Tiphanie Doucet gives a glimpse of her upcoming EP, Painted Blue, via the sublimely sentimental ode, "You and I".

Music

PM Picks Playlist 3: WEIRDO, Psychobuildings, Lili Pistorius

PopMatters Picks Playlist features the electropop of WEIRDO, Brooklyn chillwavers Psychobuildings, the clever alt-pop of Lili Pistorius, visceral post-punk from Sapphire Blues, Team Solo's ska-pop confection, and dubby beats from Ink Project.

By the Book

The Story of Life in 10 1/2 Species (excerpt)

If an alien visitor were to collect ten souvenir life forms to represent life on earth, which would they be? This excerpt of Marianne Taylor's The Story of Life in 10 and a Half Species explores in text and photos the tiny but powerful earthling, the virus.

Marianne Taylor
Film

Exploitation Shenanigans 'Test Tube Babies' and 'Guilty Parents' Contend with the Aftermath

As with so many of these movies about daughters who go astray, Test Tube Babies blames the uptight mothers who never told them about S-E-X. Meanwhile, Guilty Parents exploits poor impulse control and chorus girls showing their underwear.

Music

Deftones Pull a Late-Career Rabbit Out of a Hat with 'Ohms'

Twenty years removed from Deftones' debut album, the iconic alt-metal outfit gel more than ever and discover their poise on Ohms.

Music

Arcade Fire's Will Butler Personalizes History on 'Generations'

Arcade Fire's Will Butler creates bouncy, infectious rhythms and covers them with socially responsible, cerebral lyrics about American life past and present on Generations.

Music

Thelonious Monk's Recently Unearthed 'Palo Alto' Is a Stellar Posthumous Live Set

With a backstory as exhilarating as the music itself, a Thelonious Monk concert recorded at a California high school in 1968 is a rare treat for jazz fans.

Music

Jonnine's 'Blue Hills' Is an Intimate Collection of Half-Awake Pop Songs

What sets experimental pop's Jonnine apart on Blue Hills is her attention to detail, her poetic lyricism, and the indelibly personal touch her sound bears.

Music

Renegade Connection's Gary Asquith Indulges in Creative Tension

From Renegade Soundwave to Renegade Connection, electronic legend Gary Asquith talks about how he continues to produce infectiously innovative music.

Film

What 'O Brother, Where Art Thou?' Gets Right (and Wrong) About America

Telling the tale of the cyclops through the lens of high and low culture, in O'Brother, Where Art Thou? the Coens hammer home a fatalistic criticism about the ways that commerce, violence, and cosmetic Christianity prevail in American society .

Music

A Certain Ratio Return with a Message of Hope on 'ACR Loco'

Inspired by 2019's career-spanning box set, legendary Manchester post-punkers A Certain Ratio return with their first new album in 12 years, ACR Loco.

Books

Oscar Hijuelos' 'Mambo Kings Play the Songs of Love' Dances On

Oscar Hijuelos' dizzyingly ambitious foot-tapping family epic, Mambo Kings Play the Songs of Love, opened the door for Latinx writers to tell their stories in all their richness.

Music

PM Picks Playlist 2: Bamboo Smoke, LIA ICES, SOUNDQ

PopMatters Picks Playlist features the electropop of Bamboo Smoke, LIA ICES' stunning dream folk, Polish producer SOUNDQ, the indie pop of Pylon Heights, a timely message from Exit Kid, and Natalie McCool's latest alt-pop banger.

Film

'Lost Girls and Love Hotels' and Finding Comfort in Sadness

William Olsson's Lost Girls and Love Hotels finds optimism in its message that life tears us apart and puts us back together again differently.

Music

Bright Eyes' 'Down in the Weeds' Is a Return to Form and a Statement of Hope

Bright Eyes may not technically be emo, but they are transcendently expressive, beatifically melancholic. Down in the Weeds is just the statement of grounding that we need as a respite from the churning chaos around us.

Film

Audrey Hepburn + Rome = Grace, Class, and Beauty

William Wyler's Roman Holiday crosses the postcard genre with a hardy trope: Old World royalty seeks escape from stuffy, ritual-bound, lives for a fling with the modern world, especially with Americans.

Music

Colombia's Simón Mejía Plugs Into the Natural World on 'Mirla'

Bomba Estéreo founder Simón Mejía electrifies nature for a different kind of jungle music on his debut solo album, Mirla.


Reviews
Collapse Expand Reviews



Features
Collapse Expand Features

PM Picks
Collapse Expand Pm Picks

© 1999-2020 PopMatters.com. All rights reserved.
PopMatters is wholly independent, women-owned and operated.