As Sales Fall, Borders Gets New Leadership
by Jim Milliot -- Publishers Weekly, 1/5/2009 7:15:00 AM
With its stock price trading below 50 cents and holiday sales down by double-digits, the Borders Group’s board of directors has replaced CEO George Jones with Ron Marshall, a retailing veteran whose background includes overseeing the turnaround of Pathmark and the Nash Finch Company. Marshall also held management positions with Crown Books and Barnes & Noble college stores. He was most recently principal of Wildridge Capital Management, a private equity firm. In making the announcement, Borders chairman Larry Pollock said that while Borders had made progress in reducing debt, cutting expenses and improving margins, “it is imperative that the company more aggressively attack these initiatives to address its long-term future.” Pollock said Marshall’s “strong financial and turnaround expertise, vast retail experience and specific bookstore background” make him the right choice to take Borders’ initiative to the next level.
Joining Marshall on the new management team are Mark Bierley, who was named CFO and executive v-p for finance and Anne Kubek who has been named executive v-p merchandising and marketing. They replace Ed Wilhelm and Rob Gruen who are both leaving the company. Both Bierley and Kubek have been at Borders for an extended period; Bierley has been at the company since 1996, most recently as senior v-p for finance, while Kubek has been with the retailer since 1990, most recently as senior v-p, Borders Stores. In addition, Dan Smith, head of human resources, has been given the new title of chief administrative officer.
The new management team takes over following a poor holiday sales period. Total sales for the company in the nine weeks ended Jan 3, fell 11.7% with sales at its domestic superstores and Walden group down by more than double-digits. Sales at the superstores fell 13.6%, to $652.6 million with comp sales off 14.4%. Book sales were down 11%. Sales at Walden were down 16.4%, to $161.7 million, with comp sales declining 8.0%. International sales were up 1.4%. Sales through Borders.com totaled $20.3 million.
A Borders spokesperson said Marshall was “focusing his initial time on the business and therefore is not doing any immediate interviews.”
One focus of Marshall's will be avoiding a delisting from the New York Stock Exchange. Last week, the company was notified that because its stock has been trading at below $1 over the last 30 days, it may be delisted from the NYSE. Borders has about six months to improve its stock price or face delisting.
