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Borders Group
Borders Group
Borders Group, Inc.
Type Founded Headquarters Key people Industry Revenue Employees Subsidiaries
Public (NYSE: BGP) 1971 Ann Arbor, Michigan Ron Marshall, CEO Mark Bierley, CFO Retail (Specialty) ▼$3.3 billion USD (2009)[1] +27,000 (2009)[1] Borders UK Ltd(17% Stake) Paperchase
Borders’ current flagship store in Downtown Ann Arbor, Michigan.
The original Borders bookstore was located in Ann Arbor, Michigan, where it was founwww.borders.com (consumer site) ded in 1971[2] by brothers Tom and Louis Website www.bordersgroupinc.com(corporate Borders during their undergraduate and site) graduate years at the University of Michigan. The Borders brothers’ inventory system tailored each store’s offerings to its comBorders Group (NYSE: BGP) is an internamunity. A sister company, Book Inventory tional bookseller based in Ann Arbor, Systems (1976-1994), was founded to serve Michigan. Borders is (as of 2005) the secondas a wholesaler for, and provide the brothers’ largest bookstore chain in the United States custom inventory system to, regional inde(after Barnes & Noble), selling a wide variety pendent bookstores such as John Rollins, of books, CDs, DVDs, periodicals, as well as Thackeray’s, Schuler Books, and Joseph-Beth gifts and stationery. Booksellers. Until Borders Superstore expanIn 2004, Borders reached an agreement sion occurred in the early 1990s, BIS serwith Starbucks subsidiary Seattle’s Best Cofviced more independent stores than Borders fee to operate the cafes in its domestic superstores. Former Hickory Farms president stores under the Seattle’s Best brand name. Robert F. DiRomualdo was hired in 1989 to As of 2009, there are 517 Borders stores expand the company. in the United States, and approximately 466 The first Borders bookshop, with a meager stores in the Waldenbooks Specialty Retail stock of used books, was located in two segment, including Waldenbooks, Borders rooms above 209 State Street, north of the Express, Borders airport stores, and Borders State Theater; curiously, these rooms’ previOutlet. During the autumn and winter ous renter was one James "Iggy" Osterberg, months, they also operate calendar stores who went on to become punk rock pioneer and mall kiosks under the Day By Day CalenIggy Pop. From there the brothers soon dar Company name. moved, briefly, to a tiny ground floor + mezzanine operation in the Maynard House apartment building, on the SW corner of William and Maynard streets. In 1971 they bought out the stock of Wahr’s, an 80-yearBeginnings old bookstore which was ending business at 316 South State, and moved into that
History
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location. Wahr’s had been mainly a textbook and school supplies vendor, but the brothers did not deal in textbooks. Soon after the move back to State Street, they switched entirely from selling used books to new ones, and then leapt at the chance to occupy much larger quarters that had become available across State Street, in the former location of the Wagner & Son men’s clothing store. This site, 303 S. State, is now part of the Steve & Barry’s sportswear chain. The current flagship store is in Downtown Ann Arbor, Michigan at the corner of Liberty and Thompson Streets, in the building once occupied by the Jacobson’s Department Store, which went out of business before Borders moved to it. Although not the original location (as noted above), it is still identified as "Borders #1".
Borders Group
Borders on Briggate in Leeds, West Yorkshire, UK. Britain from Philip and Richard Joseph. The Australian, New Zealand and Singaporean stores were sold in June 2008 to A&R Whitcoulls (who also own local competitor Angus & Robertson) to pay off debt. In 1998, Borders (UK) Ltd. was established as a Borders Group subsidiary and is now one of the country’s leading booksellers over its Borders and Books etc. brands. However, due to the fierce competition in the UK marketplace, a number of these Books etc. stores will be closed and will be replaced by larger Borders stores in retail parks on the edge of town. In Q3 2006, the Singapore store emerged as the best performing amongst the entire group’s 559 outlets, with the highest revenue generated per Square foot[3]. The highest grossing store in US territory is located in Puerto Rico which was recently remodeled and expanded.
Kmart and Waldenbooks
Borders was acquired in 1992 by Kmart, which had acquired mall-based book chain Waldenbooks eight years earlier in 1984. Kmart had struggled with the book division, having first tinkered with the assortment, and later with discounting. In the Borders acquisition, Kmart merged the two companies in hopes the experienced Borders senior management could bail out floundering Waldenbooks. Instead, much of the Borders senior management team fled the company, leaving an even larger and more unwieldy division for Kmart executives to handle, on the heels of aggressive expansions by rivals Barnes & Noble and Crown Books. Giving up on the division entirely in 1995, at the beginnings of its own fiscal problems and under intense pressure from stockholders, Kmart allowed Borders to buy itself out through a highly-structured stock-purchase plan. The newly liberated company was initially called "Borders-Walden Group", but had changed its name to the "Borders Group" by the end of the year.
Franchise stores
International expansion
In 1997, the company established its first international store in Singapore, occupying 32,000 square feet (3,000 m2) in Wheelock Place, Orchard Road, which was then the largest bookstore there. It has since opened another 41 stores in the United Kingdom, Ireland, Australia, and New Zealand, and bought 35 Books etc. stores throughout
A typical Borders in Chapel Hill, North Carolina.
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In April 2005, Borders Group opened its first franchise store with Malaysia’s Berjaya Books Sdn. Bhd. in Kuala Lumpur. It is located in Berjaya Times Square, which is the world’s biggest mall built in a single phase, with 7,500,000 square feet (700,000 m²). The store in Berjaya Times Square was advertised as being the world’s biggest Borders at 60,000 square feet (5,600 m²). After Berjaya Times Square, Borders opened their second store in Malaysia. It was located in The Curve, Mutiara Damansara. The third Borders store opened in Queensbay Mall, Penang on 7 December 2006. Borders opened a franchise store in Mall of the Emirates in Dubai, UAE in October 2006. Despite financial difficulties in the domestic market, Borders has continued to expand its franchises, recently adding stores in Malaysia, Oman and Sharjah.
Borders Group
The latest Borders Digital Center opened in Alameda, California in May 2008.[6] In late 2007, Borders installed digital video monitors in select stores. The monitors display special programs, as well as news, sports, and financial information provided through Ripple Networks, Inc., a Californiabased marketing service.[7]
Declining profits
In March 2008, Borders announced that they would try to sell their chain because of financial difficulties. There were rumors that Borders Books approached Barnes and Noble in hopes of a buyout, but it turns out that it all was just speculation by Wall Street and the media. Currently, the chain is in debt, having furthered their financial instability by borrowing $42.5 million USD in March from Pershing Square Capital Management, the company’s major stockholder, to keep the company running through the remainder of the fiscal year. The loan is said to have a very high interest rate of 12.5%, which means that the chain will have to post a significant profit to stay afloat in the future. Following the announcement of the loan, Borders’ shares dropped 28.6% to $5.07/share. The shares continued to drop throughout the year, and as of January 28 2009, Borders stocks were trading at $0.530 on the NYSE. Later in 2008, the company announced that its marketing alliance with Amazon.com would end, (Amazon had been essentially acting as Borders’ online component.) and subsequently launched its own web sales site.[8] In 2008, Borders signed an agreement with Lulu Press to create "Borders Personal Publishing". Through this, authors can selfpublish their work through Borders and its website, and it is all "powered by Lulu".[9] On January 5, 2009, the company announced that Ron Marshall would take over as chief executive, effective immediately.[10] Former CEO George L. Jones received a severance package of $2.09 million.[10] Mark Bierley was also promoted to chief financial officer, replacing Ed Wilhelm.[11] The changes in management were due to Borders’ holiday sales falling by 11.7 percent to $868.8 million.[10] On March 30, 2009, Marshall announced that the loan from Pershing Square would be extended for another year, (coming due on April 1, 2010) at an interest rate of 9.8%.
Changes in business plan
In March 2007, Borders Group announced it would scale down the number of Waldenbooks outlets it had by half, to about 300, in the next year. Also in March 2007, Borders Group announced the disposal of its UK and Ireland businesses including its Books Etc. Business in the UK, with the aim of revitalizing the core U.S. business, however it was also announced that Borders Group would retain the Paperchase Stationery Business. However international expansion would be likely to continue via franchising. [4] In September 2007 it was announced the UK and Ireland business of 42 Borders Stores and 28 Books etc stores had been sold to private equity group Risk Capital Partners for an initial £20m. [5] Throughout 2007, Borders silently launched a limited test-run of a new concept program. Currently named the Digital Center, this program offers select electronic devices such as MP3 players, digital photo frames, and the Sony Reader. It also offers services such as in-store kiosks for partner websites Ancestry.com and Shutterfly.com, as well as customer CD-burn and download system provided by the Mix & burn company. The Borders Digital Center is currently operating in limited capacity at select locations in Ann Arbor, Michigan, Novi, Michigan, Denver, Colorado, Las Vegas, Nevada, Panama City Beach, Florida, and Noblesville, Indiana.
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This, combined with a recent series of layoffs and new promotional deals with major publishers, caused Borders stock to rise. Within a week, it had topped the $1.00 mark. By mid-April it had approached $2.00. As a result, the company cancelled plans to ask its shareholders for permission to perform a reverse stock split.
Borders Group
References
[1] ^ "Company Profile for Borders Group Inc (BGP)". http://zenobank.com/ index.php?symbol=BGP&page=quotesearch. Retrieved on 2008-10-02. [2] By the Book [3] "S’pore store is Borders’ No. 1", The Straits Times (Life!), 15 November 2006, p. 10 [4] Borders Media Relations [5] BBC NEWS | Business | Borders sells its UK book stores [6] Borders Media [7] Ripple’s high-definition screens heading for borders: company can fine-tune videos to chain’s different locations, Los Angeles Business Journal. [8] "Borders Returns to Online Sales, Drops Amazon", International Business Times, Diane Oswald, 27 May 2008 [9] /http://publish.borders.com/index.html [10] ^ New York Times article: "Executives Replaced at Borders as Sales Fall". [11] http://www.chicagotribune.com/business/ chi-tue-brf3-borders-tyson-ceojan06,0,259005.story
See also
The Borders Book and Music store at the Severance Town Center, Cleveland Heights, Ohio. • List of bookstore chains • Paperchase • Book Stacks Unlimited
External links
• • • • • Borders.com BordersStores.com. Official Waldenbooks and Borders Express Borders engages in self-censorship Paperchase, a Borders Group company
Retrieved from "http://en.wikipedia.org/wiki/Borders_Group" Categories: Companies listed on the New York Stock Exchange, Bookstores of the United States, British Book Awards, Companies based in Ann Arbor, Michigan, Retail companies established in 1971 This page was last modified on 15 May 2009, at 05:57 (UTC). All text is available under the terms of the GNU Free Documentation License. (See Copyrights for details.) Wikipedia® is a registered trademark of the Wikimedia Foundation, Inc., a U.S. registered 501(c)(3) taxdeductible nonprofit charity. Privacy policy About Wikipedia Disclaimers
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