The dismal holiday sales reported by Borders Group last Monday were a disappointment to both the retailer and publishers. In explaining weak third-quarter results in November, Borders CEO Ron Marshall said part of the reason was that the chain had devoted much of its energy to getting its stores ready for the crucial holiday shopping season; he added he was pleased with the condition of most of the stores. But when the holiday was over, the decline in Borders's comps were double that of Barnes & Noble and Books-A-Million.
Commenting on the poor performance, Marshall vowed that the chain would “intensify our focus on creating and delivering a shopping experience that drives profitable sales.” A Borders spokesperson said that while the company wouldn't detail specific traffic and sales driving strategies because of competitive concerns, she said Borders will look to better use its Borders Rewards loyalty program to build sales. Dan Angus has recently been put in charge of finding ways to use the program. Borders will also continue its “in-stock guarantee” program it began for the holidays. Under the program, if a book a customer wants is not in stock in a particular store, but is sold via Borders.com, Borders will ship the title to the customer's home and pay the shipping charges. Borders's “make book” program, through which the company gives extra support to a particular title, will also continue in 2010.
For publishers, the poor holiday performance only increased their concerns about the health of the nation's second largest bookstore chain. Publishers have adopted different approaches to guard against the possibility of a Borders bankruptcy, and the bad holidays were seen by one publisher as “more of the status quo, but at a higher anxiety level.”
Despite a report by the financial news service Debtwire (and picked up by numerous publications including PW Daily) that a number of smaller publishers have become increasingly frustrated by delays in payments from Borders, the company said it was not aware of any payment problems, and interviews by PW with large and small publishers found Borders to be current on payments. Still, as one publisher noted, the disappointing holiday was “nervous making.” And given its plan to close 185 outlets in its Waldenbooks specialty group this month, publishers are not counting on their business with Borders growing in 2010. In looking for a silver lining in the Borders situation, one publisher observed, “Every month that they are around and paying should be considered a bonus.”
Holiday Sales Wrapup
|Source: Reed Business Information |
|Retailer||Total Sales||% Change||Comp Sales|
|Barnes & Noble stores||$1,100.0||-5.0%||-5.4%|
|Borders Group Superstores||649.2||-14.7||-14.6|