Borders replaces CEO, reports poor holiday results
Borders Group has replaced president and CEO George Jones as part of a management shakeup intended to help drive a turnaround of the company during the recession.
Ron Marshall became Borders president and CEO on January 5, and also will serve as a director. Most recently, Marshall was principal of Wildridge Capital Management, a private equity firm he founded. Prior to that, Marshall helped drive turnarounds at Nash Finch Co. and Pathmark Stores Inc.
Borders Group also released its sales results for the nine-week holiday period ended Jan. 3. Consolidated sales totaled $868.8 million, an 11.7% decline compared to the same period last year. Within the Borders superstore segment, total sales for the holiday period were $652.6 million, a 13.6% decrease. Comparable store sales at Borders superstores declined by 14.4%. Borders.com sales for the nine-week holiday period were $20.3 million. Borders launched a standalone e-commerce site in 2008 after a relationship with Amazon.com came to an end.
Within the Waldenbooks specialty retail segment, total sales for the holiday period were $161.7 million, a 16.4% decrease. Comparable store sales for Waldenbooks declined by 8%.
“Progress has been made by Borders Group over recent quarters within the challenging economy to reduce debt, improve cash flow, cut expenses, enhance inventory productivity and improve margins, but it is imperative that the company more aggressively attack these initiatives to address its long-term future,” said Larry Pollock, Borders Group board of directors chairman, in a statement. “We are confident that Ron Marshall, with his strong financial and turnaround expertise, vast retail experience and specific bookstore background, is the right choice to lead a new management team and boldly take these efforts to the next level.”
Borders also named Mark Bierley as CFO and EVP, finance, replacing Ed Wilhelm, who was CFO for the past eight years.
Anne Kubek has been appointed EVP, merchandising and marketing, replacing Rob Gruen, who is leaving Borders Group after approximately two years.
Borders Group was notified on December 31 by the New York Stock Exchange that the company does not satisfy one of its standards for continued listing applicable to the company's common stock because the average closing price of the company's common stock was less than $1 per share over a consecutive 30-trading-day period. In order to maintain its listing, Borders must notify the NYSE within 10 business days of receipt of the non-compliance notice of its intent to cure this price deficiency.