How many people now work at Borders' headquarters in Ann Arbor? Borders won't say
Borders won't say how many people are employed at its headquarters on Phoenix Drive.
File photo
The book store chain, faced with questions about its long-term viability as an independent company, is slowing external communications to a minimum.
After completing its second round of layoffs at its corporate headquarters last week, Borders is now refusing to discuss how many employees work at the Phoenix Drive complex.
The figure was about 650 after the company laid off 88 Ann Arbor workers in January - but the new number is unclear. One person claiming to have information about the company's internal operations, posting to a widely followed blog that is critical of Borders, estimated the layoffs at 55 people. Other estimates range from 50 to 80.
And don’t expect to get more information about Borders’ Ann Arbor-based workforce anytime soon.
“I don’t think we’re going to talk about it anymore going forward,” Borders spokeswoman Mary Davis told AnnArbor.com this afternoon.
Now Borders says that its new CEO, tobacco industry veteran and activist investor Bennett LeBow, does not want to talk either. That follows a general strategy of limited - or no - media interviews granted by LeBow’s immediate predecessors. Since launching in July 2009, AnnArbor.com has never been granted an interview with a CEO of Borders.
LeBow, who became chairman and CEO of Borders Group this summer after investing $25 million in the company, is positioning himself to take further control of the bookseller.
But LeBow has yet to outline a specific vision for the company since joining the company in May.
“Mr. LeBow just doesn’t do media interviews,” Davis said. “That’s his personal choice.”
Michael Norris, an industry analyst with Maryland-based Simba Information, told AnnArbor.com that he’s noticed similar bouts of silence among other companies in the books industry.
“They don’t just don’t communicate well,” he said of the industry.
LeBow, the fourth CEO for Borders Group in less than two years, has significant incentive to reverse Borders’ decline or steer the company to a lucrative dismantling.
Since buying 11.1 million shares of Borders’ stock (NYSE: BGP) at a price of $2.25 in May, he’s seen those shares plummet to $1.20.
That indicates that investors seem to be losing faith in Borders. Shares must generally stay above $1 a share to avoid the threat of being de-listed from the NYSE.
The company’s extensive, costly real estate footprint is a heavy burden, and its business model is being fundamentally challenged by online sales and the emerging electronic books industry.
“I don’t know what’s going to happen to Borders, but they look like they’re sort of on life support,” Davidowitz told TheStreet on Thursday. “So they may go away.”
Borders’ silence comes as its chief physical store competitor, Barnes & Noble, is putting itself up for sale. Industry observers say Barnes & Noble may need to be taken private and reorganized by a private equity firm to stay competitive.
Norris, for one, believes that the fate of Borders and Barnes & Noble may be intertwined as Amazon and Apple make an aggressive play for e-book sales.
“Borders, Barnes & Noble and the independent bookseller down the street have something in common -- they have to sell books in order to stay alive,” Norris said. "It’s just going to be bad for publishers and bad for consumers if companies that don’t have a stake in the future of books are the ones left selling them.”
Borders will report its second-quarter financial results in a call with investors on Sept. 1. It's unclear whether the company will use the call to offer additional details about its survival strategy.
Borders reported a net loss of $64.1 million in the fiscal quarter ended May 1. The company's first-quarter loss was down from $86.0 million in the first quarter in 2009, but same-store sales at Borders' super stores in the U.S. dropped 11.4 percent. The company's total revenue dropped from $650.2 million to $547.2 million.
Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.
Comments
javajolt1
Thu, Aug 19, 2010 : 8:54 a.m.
Actually Borders WAS innovative...That's how they became "Borders". Tom and Louis developed a novel software system to catalog and order books. This was the difference-maker between any other independent bookseller and the meteoric rise of Borders. The innovation just happened to come long before there was a "world headquarters" or "Quarterly All Hands Meetings" with Bruce Quinell. The innovation came with the Borders brothers and was extinguished by K-Mart and Joe Antonini...followed by a rapid succession of CEO's (with the possible exception of Bob DiRomauldo) that lasted very little time, provided zero continuity, and sucked the life out of the company with reckless expansion.
UofM_Fan
Wed, Aug 18, 2010 : 9:27 a.m.
I hate to say it, but Borders was never innovative. I remember a QAHM (Quarterly All Hands Meeting) were Bruce Quinell stated that the whole concept of selling books online was a doomed concept. It was never going to succeed. A few months later came the announcement that Borders was forming a special SWAT team tasked with getting us online as quickly as possible. Not long after that it was announced that we couldnt run it effectively, and after Borders.com losing truckloads of money we were turning control of the site over to our biggest competitor, Amazon. Yes, Amazon would run the entire operation and just slap a Borders label on things. We of course would get a small cut. Thats like Ford deciding that they dont want to invest in building an electric car, so theyre going to let Chevy sell Volts, but occasionally slap a Ford badge on a few of them as they come off the line... and then sell them at a much higher price.
UofM_Fan
Wed, Aug 18, 2010 : 9:27 a.m.
It is sad, but the problems with Borders have been a long time coming. The problems stem from a lack of true leadership. Managers manage, while leaders lead. During the first half of my career at HQ I had the honor of working for some excellent leaders. If they asked me to go through a brick wall, I would have. Even Bobby D. was a real leader. Personally, I felt that he was an arrogant and rude person, but he knew what he was doing and did his job well. In the early 2000s the environment changed. We started to have a revolving door for all levels of management. People would come in, bring in their own people, scrap everything that was going on so that they could put their own agenda in place. They would rake in the money and jump ship. This would leave things in a mess much worse than when they came on. Someone new would come in with lofty ideas on how they could fix things. But the cycle would repeat with each new management team pillaging the company for their own personal gain. I remember the days were more than 2000 people worked in the headquarters. I cant even imagine what kind of nightmare it must be to try to run the business with fewer than 600.
stunhsif
Wed, Aug 18, 2010 : 8:27 a.m.
@snapshot, Agree with you. Very sad that no one comments about the loss of tax revenue if and when Borders closes. I do feel for the employees because it appears that there is nothing they can do to stop their "death spiral" downward. Their business model is broken. Guess we'll just have to have our taxes go up even more to keep the public employees well funded. The state of Michigan is on life support!
snapshot
Tue, Aug 17, 2010 : 10:23 p.m.
Here's a company struggling to survive and if they go under will further decrease the tax rolls, yet it appears to be inconsequential to the folks of Ann Arbor.
javajolt1
Tue, Aug 17, 2010 : 4:47 p.m.
....oh and one more thing.... since so many people telecommute to work these days and don't even put in a five day week at a physical building AND the nature of a world headquarters puts people on a plane for weeks at a time, I cannot believe anyone would think this is a "leading indicator of stock performance". What is the cited source for your quote?
javajolt1
Tue, Aug 17, 2010 : 4:43 p.m.
Well...you lay that formula out there like its a tried and true scientific equation. Not even close.... What does counting cars get you? What is your basis of employement in the forst place? Are you averaging one, two, three employees per car? What about those that bike or take a bus to work? What about vacations? I assume this only works for the parking lot of a "World Headquarters". What if the basis of the employee count is small to begin with? That makes the margin for error HUGE. It's an interesting thought, but highly unscientific...and probably of little or no use. Also, saying it may be an indicator of the current health of a company is somewhat of a stretch...saying it is an indicator of STOCK PERFORMANCE is pure suicide. I like Tarot cards better.
AlwaysLate
Tue, Aug 17, 2010 : 4:25 p.m.
@racerx... As a former Lease Accountant at Borders I can tell you there is no real estate to speak of... The vast majority of their store locations are lease from landlords and developers such as Taubman, Macerich, Simon Property Group, Jones, Lang, LaSalle, Aronov...and dozens of small landlords throughout the country. Even Store #1, downtown, and the World Headquarters on Varsity Drive are leased properties.
javajolt1
Tue, Aug 17, 2010 : 1:24 p.m.
Huh???
Bob
Tue, Aug 17, 2010 : 1:14 p.m.
This is kind of funny and sad at the same time....When I first started working at Borders corportate office in July 2000, there were 1200+ employees in the building on Phoenix Drive....I was lucky enough to get out of there (and get a better job) in January of 2009...at that point, corporate office staff was somewhere around 800....I gotta believe that it's now 500 or less...A once proud A2 company just can't compete with the Amazon/Wal-Mart stores...sad but true...
Top Cat
Tue, Aug 17, 2010 : 12:42 p.m.
The answer is probably something similar to the joke about how many people work in the factory of the future, the answer being 1 man and 1 dog. The purpose of the dog is to keep the man away from the machinery. The purpose of the man is to feed the dog.
djm12652
Tue, Aug 17, 2010 : 12:35 p.m.
um...who cares? It's survival of the fittest...
Rasputin
Tue, Aug 17, 2010 : 10:58 a.m.
Final curtain call.
glimmertwin
Tue, Aug 17, 2010 : 10:02 a.m.
Very sad. They obviously lost their focus somewhere along the line. Much like the auto industry, fault will be focused on everyone except their poor management.
javajolt1
Tue, Aug 17, 2010 : 9:18 a.m.
This is exactly like the Blockbuster Video story of a few weeks ago. Borders, like Blockbuster was innovative. Their rapid growth the result of their novel software system for cataloging books. Then like Blockbuster, they got complacent. NetFlix has all but killed Blockbuster and Amazon, Apple and even Barnes and Noble(!!) is just about to suck the last breath out of Borders. It's too late to do anything; a parade of CEO's embarking on the predictable path of acquisition and then cost cutting through divesting those same acquisitions at fire sale prices. Oh yeah...then they got rewarded with huge buyouts. Anyone surprised about the demise of Borders is nostalgic and hasn't been paying attention. It should be a cautionary M.B.A. class showing what WILL happen when breakneck acquisition replaces innovation and creativity.
A2K
Tue, Aug 17, 2010 : 9:15 a.m.
A sad state/end to what was once a lovely 3-story shop on State St. where I wandered around as a kid and solidified my love of books.
walker101
Tue, Aug 17, 2010 : 9:01 a.m.
Time to pull the plug.
racerx
Tue, Aug 17, 2010 : 5:17 a.m.
Again, dead store walking. The new CEO has been buying stock so it's value will rise when the company is either sold and broken up. The new electronic book reader isn't enough to save Borders. The vast real estate is probably worth more than the selling of books.