Borders replaces CEO, CFO
Chain's holiday same-store sales fell 14%
By Danny King -- Video Business, 1/5/2009
JAN. 5 | Borders Group replaced its chief executive and chief financial officers after reporting that its same-store sales during the holidays plunged 14% from a year earlier.
CEO George Jones, who had run the company since July 2006, will be replaced by Ron Marshall, former CEO of food distributor Nash Finch Co. and founder of private-equity firm Wildridge Capital Management, Borders said in a statement today. Additionally, Mark Bierley, Borders' senior VP of finance, will replace chief financial officer Ed Wilhelm, who had been the company's financial chief for eight years.
Borders' finances have suffered as the combination of less foot traffic and slumping music sales has pulled down same-store revenue. The company, which has tried to cut operating costs and debt by reducing inventory and trimming floor space dedicated to lower-margin categories such as music, said in November that its loss for the quarter ended Nov. 1 widened 8.9%, while sales fell 10%.
Same-store sales for the nine weeks ended Jan. 3 dropped 14%, while total revenue fell 12% to $868.8 million, the company also said today.
"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," Larry Pollock, chairman of the company's board, said in today's statement.
Marshall, 54, ran Nash Finch, whose 2007 sales were $4.53 billion, for eight years before founding Wildridge. He was previously chief financial officer at Pathmark Stores grocery chain for four years.
In March, Borders hired J.P. Morgan and Merrill Lynch to assess strategic alternatives, including a possible sale. The company in November said it's no longer considering a sale, although it might still sell its Paperchase Products stationary unit to Pershing Square Capital Management for $65 million.
