Amid Slumping Sales, Borders Replaces CEO
MICHELE NORRIS, host:
From NPR News, this is All Things Considered. I'm Michele Norris. The bookstore chain Borders has announced a major management reorganization. Sales are down, and the company's stock is at bargain basement prices. As NPR's Lynn Neary reports, Borders is trying to turn itself around.
LYNN NEARY: When superstores like Borders first hit the scene, they were viewed as aggressive competitors who would put the neighborhood bookstore out of business. And indeed, Borders did make life hard for a lot of independents. But now it is Borders itself which is in jeopardy. Even before the latest economic crisis, Borders has been struggling to survive in an industry facing increased competition from online retailers, most notably Amazon.
Today, with holiday sales down almost 12 percent over last year, the company announced that it is bringing in new management. Ron Marshall, whose experience includes helping to drive the financial turnaround of major retailers in the food industry, has been named the new president and CEO of Borders. Marshall also has experience in the book retail industry, a combination the company hopes will be effective in helping it climb out of its current troubles. In addition to sinking sales at its stores, Borders' stock has been selling below a dollar a share for more than 30 days. And as a result, it has been notified that it could be delisted by the New York Stock Exchange. The company has six months to improve its stock price in order to avoid being delisted.
In addition to appointing Marshall as CEO, the board of directors also made several other changes at the top. In announcing the decisions, Borders Group Chairman Larry Pollock said the company had to move aggressively in this challenging economy to address its long-term future. In taking over as CEO, Marshall sounded a positive note, describing Borders as a powerful brand with millions of loyal customers who love to shop in its stores. Marshall said these are assets that can be built upon once the company is on a more solid financial footing. Lynn Neary, NPR News, Washington.
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