Borders CEO outlines 2010 turnaround strategies for Ann Arbor-based bookseller
The interim CEO of Borders Group Inc. outlined four key strategies for the Ann Arbor-based book retailer as it closes the financial books on 2009.
Michael Edwards, speaking on an investor conference call this morning, said he’s focusing efforts on “transforming the Borders brand and updating the business model.”
Strategies, he said, will include:
- Improving the in-store experience.
- Reinventing the Borders Rewards customer loyalty program, which he described as one of the largest in specialty retail.
- Leveraging education and social media forums.
- Growing Borders.com online sales and developing strategic business partnerships.
In 2010, Edwards said, the chain will establish itself as a “neutral expert” on e-book devices.
The company will be establishing “Area E” centers in its stores, extending the existing information desks to information centers for all aspects and brands of e-readers.
“As many as 10 different models” will be sold in high-traffic stores, Edwards said, with accessories and extended warranties on e-reader products also offered by Borders.
That “Area E” center will be rolled out by fall, in time for holiday 2010 shopping.
The details on the plans for the year come a day after Borders announced 2009 results and details on two financing deals: Payoff of an outstanding $42.5 million loan and renegotiation of a line of credit in to a new, $700 million secured credit facility that martures in March 2014.
Same-store sales in the fourth quarter of 2009 dropped 14 percent, and the year’s loss was $109.4 million, down from $186.7 million in 2008.
Other changing elements at Borders stores, according to Edwards, include:
- Shifting more personnel to the sales floor.
- Adding more inventory in the children and teen sections of stores.
- Shifting to more higher-margin inventory, including non-book products.
- Providing free shipping when a customer cannot find a book in-store and orders from Borders.com.
- Utilizing events and using stores as gathering spaces to build community.
No specific store closings are planned, according to the conference call. Five stores were closed in late 2009.
Meanwhile, Borders expects to soon announce the hire of an executive vice president to drive digital sales growth.
Borders stock [NYSE: BGP] is trading at $2.43 per share this afternoon, up from $1.72 at Wednesday's close of trading. The company's market cap is $145 million.