Borders Group
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Company Snapshot
If you want John Updike or Janet Jackson to go with your java, Borders is for you. The #2 bookstore
operator in the US (after Barnes & Noble), Borders Group has stores in 50 states, as well as in the UK,
Australia, New Zealand, Puerto Rico, and Singapore. (The company plans to sell or franchise its
international stores.) Its more than 1,200 retail stores include about 570 Borders superstores, about 560
mall-based Waldenbooks stores, and 30 UK-based Books etc. shops. To lure customers, the superstores
host literary events and promote an environment with comfortable seats and cafes; they also sell music,
videos, and DVDs. The firm has agreed to sell Borders (UK) to a London private equity for $40 million.
The US book giant is selling its UK subsidiary to Risk Capital Partners in order to focus on its core US
superstore business. The deal, which stipulates that Borders will keep a one-sixth stake in Borders (UK),
includes 41 Borders superstores in the UK and Ireland and 28 Books etc. stores in the UK.
Borders strives to reflect local tastes and interests in its superstores, even employing community relations
representatives. Literary and community events include author signings and lectures, and local musician
showcases.
Borders superstores carry on average 94,500 book titles, 14,000 music titles, and 7,400 movie titles; and
average about 25,000 sq. ft. Its Waldenbooks stores are an average size of 3,800 sq. ft. and Books etc.
stores, located mainly in London and in airports around the UK, average about 4,600 sq. ft. There are about
70 international Borders-brand superstores.
Spurred by the competitive pressures of the industry, the company announced a change in strategy in early
2007: to focus on its core domestic business and establish its own proprietary Web site. Previously,
Border's Web operations were operated through an agreement with rival Amazon.com. The company is
ending its relationship with Amazon and will debut its new stand-alone e-commerce site in 2008.
As part of the announced strategy change, Borders plans to sell or franchise its international stores. It also
continues to reduce the number of its Waldenbooks locations, expecting to have only 300 by the end of
2008.
The company wants to grow by opening new stores and drastically remodeling existing locations. It
generally averages almost 50 new international and domestic superstores per year, and remodels about 100
stores. Borders is putting its remodeling efforts on hold as it develops a new store prototype that
incorporates "digital centers" for customers to interact with various digital products such as e-books and
MP3 players. Borders also plans to make more exclusive book deals to drive more people into the stores.
In addition to bookstores, Borders operates Paperchase Products (97%-owned) -- a UK stationery and gift
items retailer with about 100 locations. The company has imported that business to the US by opening
about 250 Paperchase shops inside select Borders superstores. Borders Group has a licensing agreement
with Seattle's Best Coffee (SBC), a subsidiary of coffee house giant Starbucks, under which almost all
domestic Borders have SBC-branded cafes.
All information gathered from Hoovers
George Jones, a retail veteran most recently head of Saks Incorporated, was appointed the company's CEO
in mid-2006, replacing Greg Josefowicz.
Headquarters:
Employees:
2007 Sales:
2007 NI:
Ann Arbor, MI
33,600
$4.113 Billion
($151.3 Million)
Operating Segments
Bookstores:
-Borders
-Waldenbooks
Current News:
No change for borders after private equity sale
Borders has sold its UK and Ireland operations to a private equity firm. Borders will maintain a 17% stake
in the new company and business will continue as usual. The deal is largely thought to be completed at a
cut rate and the new private ownership group is very pleased as the entity will begin operations with zero
debt.
Borders Group Names Anne Frazer Senior Vice President, Merchandise Planning, Replenishment and
Allocation
Borders has hired Anne Frazer to oversee its supply chain operations within the organization. Ms. Frazer
has experience in inventory management at Toys “R” Us, Home Depot and Booz Allen Hamilton. Borders
sees her as a key asset as it seeks to implement a change within the organization.
Facts and Financials:
Key People:
Chairman
Lawrence I. (Larry) Pollock
President, CEO, and Director
George L. Jones
SVP, Borders Group Operations
Steve Davis
SVP and CFO
Edward W. (Ed) Wilhelm
CIO
Susan Harwood
2007 Sales (mil.)
$4,113.5
1-Year Sales Growth
0.8%
2007 Net Income (mil.)
($151.3)
1-Year Net Income Growth
(249.8%)
Largest Competitors:
Amazon.com
Barnes and Noble
Books-A-Million
All information gathered from Hoovers
(Annual Sales: $10.711 Billion)
(Annual Sales: $5.261 Billion)
(Annual Sales: $520.4 Million)