Publishers generally supported the ideas presented by Borders CEO George Jones to give the retailer a new strategic direction, although they were troubled by a few aspects. "There's much to like if Borders truly improves merchandising and marketing," said Harcourt Trade head Dan Farley. Farley, along with several other publishers, said the move to take control of its online efforts from Amazon was long overdue, and with one exception, publishers believed the plan to redirect investment away from the U.K. to American superstores should help grow the business. The lone dissenter regarding the U.K was HarperCollins CEO Jane Friedman, who said she was surprised to hear of Borders's plans to shed its U.K. superstores. HC is a major U.K. publisher and the sale of the Borders stores will hurt an already struggling bookstore market, Friedman believes. Overall, however, Friedman applauded Jones for "making some serious decisions. We'll have to see how it plays out."
Also among some of the concerns expressed by publishers: Borders's plans for increasing its proprietary publishing program; the suggestion that title breadth may be reduced; and the prospect of higher returns due to the closing of about 250 Walden outlets. "They're misguided if they think they are going to increase their margins by publishing more of their own books," said the head of one large publisher. He was particularly concerned about what he sees as Borders's plan to try to publish bestsellers. "That is not their business," he said.
The head of another large house believes cutting the selection of titles at superstores would be a mistake. While Borders's concept of developing destination sections could help draw more customer traffic into stores, this publisher emphasized that the formation of such areas shouldn't come at the expense of breadth of selection. "Fewer titles in stores is a bad idea," this publisher said. In his presentation, Jones said Borders needs to do a better job of getting a handle on its in-store inventory and suggested that technology solutions would ensure that customer demand for slower-moving titles could be met.
As for returns, a Borders spokesperson said the company believes its plan for closing the Walden outlets will not produce large returns. To limit returns, the company will follow a procedure that involves limiting future shipments to any store set to close, while also stepping up promotional and discounting activity to move existing inventory. The company followed that plan when it closed 91 outlets in last year's fourth quarter, and, according to the company, its return rate did not increase. In addition, said Borders, returns should not spike because the store-closing program will be carried out over a two-year period.
All publishers believed the changes outlined have a better chance of improving Borders's fortune than the category management initiative implemented under the old leadership. "Jones is obviously trying to get a handle on the situation," the president of a mid-sized house said, "but in this tough marketplace the proof is in the pudding."