Borders Group, Inc.

Type	Public (NYSE: BGP)
Founded	1971
Headquarters	Ann Arbor, Michigan
Key people	Ron Marshall, CEO Mark Bierley, CFO
Industry	Retail (Specialty)
Products	Books, Maps, CDs, DVDs, Calendars, Zunes, Gift Packs, Magazines, Board Games, Encyclopedias
Revenue	▼$3.821 billion USD (2007)[1]
Employees	14,100 (2008)[1]
Subsidiaries	Borders UK Ltd(17% Stake) Paperchase
Website	www.borders.com

A typical Borders in Chapel Hill, North Carolina.

Borders Group (NYSE: BGP) is an international bookseller based in Ann Arbor, Michigan. Borders is (as of 2005) the second-largest bookstore chain in the United States (after Barnes & Noble), selling a wide variety of books, CDs, DVDs, periodicals, as well as gifts and stationery.

Borders owns a majority stake in Paperchase Products Limited, a leading gifts and stationery retailer in the United Kingdom, and showcases their products in their stores, as well as Books etc., Borders' other, mostly London-based bookshop chain. In 2004, Borders reached an agreement with Starbucks subsidiary Seattle's Best Coffee to operate the cafes in its domestic superstores under the Seattle's Best brand name.

As of 2007, there are more than 500 Borders stores in the United States, and around 500 Waldenbooks and Borders Express stores, mainly in U.S. malls and airports. During the autumn and winter months, they also operate calendar stores and mall kiosks under the Day By Day Calendar Company name.

On May 27, 2008, Borders discontinued its relationship with Amazon and launched a website of its own at http://www.borders.com

[edit] History

[edit] Kmart and Waldenbooks

Borders was acquired in 1992 by Kmart, which had acquired mall-based book chain Waldenbooks eight years earlier in 1984. Kmart had struggled with the book division, having first tinkered with the assortment, and later with discounting. In the Borders acquisition, Kmart merged the two companies in hopes the experienced Borders senior management could bail out floundering Waldenbooks ^{[citation needed]}. Instead, much of the Borders senior management team fled the company, leaving an even larger and more unwieldy division for Kmart executives to handle, on the heels of aggressive expansions by rivals Barnes & Noble and Crown Books. Giving up on the division entirely in 1995, at the beginnings of its own fiscal problems and under intense pressure from stockholders, Kmart allowed Borders to buy itself out through a highly-structured stock-purchase plan. The newly liberated company was initially called "Borders-Walden Group", but had changed its name to the "Borders Group" by the end of the year.

[edit] International expansion

In 1997, the company established its first international store in Singapore, occupying 32,000 square feet (3,000 m²) in Wheelock Place, Orchard Road, which was then the largest bookstore there. It has since opened another 41 stores in the United Kingdom, Ireland, Australia, and New Zealand, and bought 35 Books etc. stores throughout Britain from Philip and Richard Joseph. The Australian, New Zealand and Singaporean stores were sold in June 2008 to local competitor Angus & Robertson to pay off debt.

In 1998, Borders (UK) Ltd. was established as a Borders Group subsidiary and is now one of the country's leading booksellers over its Borders and Books etc. brands. However, due to the fierce competition in the UK marketplace, a number of these Books etc. stores will be closed and will be replaced by larger Borders stores in retail parks on the edge of town. In Q3 2006, the Singapore store emerged as the best performing amongst the entire group's 559 outlets, with the highest revenue generated per Square feet^[2]. The highest grossing store in US territory is located in Puerto Rico which was recently remodeled and expanded.^{[citation needed]}

[edit] Franchise stores

Flagship store in Downtown Ann Arbor, Michigan.

The Borders Book and Music store at Kennedy Mall, Dubuque, Iowa.

The logo for Borders (UK) Ltd. now owned by Risk Capital Partners, note it incorporates the Books etc. brand name, a brand purchased by Borders which they continue to use for some UK stores

In April 2005, Borders Group opened its first franchise store with Malaysia's Berjaya Books Sdn. Bhd. in Kuala Lumpur. It is located in Berjaya Times Square, which is the world's biggest mall built in a single phase, with 7,500,000 square feet (700,000 m²). The store in Berjaya Times Square was advertised as being the world's biggest Borders at 60,000 square feet (5,600 m²). After Berjaya Times Square, Borders opened their second store in Malaysia. It was located in The Curve, Mutiara Damansara. The third Borders store opened in Queensbay Mall, Penang on 7 December 2006. Borders opened a franchise store in Mall of the Emirates in Dubai, UAE in October 2006.

[edit] Changes in business plan

In March 2007, Borders Group announced it would scale down the number of Waldenbooks outlets it had by half, to about 300, in the next year.

Also in March 2007, Borders Group announced the disposal of its UK and Ireland businesses including its Books Etc. Business in the UK, with the aim of revitalizing the core U.S. business, however it was also announced that Borders Group would retain the Paperchase Stationery Business. However international expansion would be likely to continue via franchising. ^[3]

In September 2007 it was announced the UK and Ireland business of 42 Borders Stores and 28 Books etc stores had been sold to private equity group Risk Capital Partners for an initial £20m. ^[4]

Throughout 2007, Borders silently launched a limited test-run of a new concept program. Currently named the Digital Center, this program offers select electronic devices such as MP3 players, digital photo frames, and the Sony Reader. It also offers services such as in-store kiosks for partner websites Ancestry.com and Shutterfly.com, as well as customer CD-burn and download system provided by the Mix & burn company. The Borders Digital Center is currently operating in limited capacity at select locations in Ann Arbor, Michigan, Novi, Michigan, Denver, Colorado, Las Vegas, Nevada, Panama City Beach, Florida, and Noblesville, Indiana. The latest Borders Digital Center opened in Alameda, California in May 2008.^[5]

In late 2007, Borders installed digital video monitors in select stores. The monitors display special programs, as well as news, sports, and financial information provided through Ripple Networks, Inc., a California-based marketing service.^[6]

In March 2008, Borders announced that they would try and sell their chain due to financial difficulties. They approached Barnes and Noble in hopes of a buyout, but after months of negotiations, in August 2008 it was listed as a high improbability. Currently, the chain is in debt, having furthered their financial instability by borrowing $42.5 million USD in March to keep the company running through the remainder of the fiscal year. The loan is said to have a very high interest rate of 12.5%, which means that the chain will have to post a significant profit to stay afloat in the future. Following the announcement of the loan, Borders' shares dropped 28.6% to $5.07/share.

Later in 2008, the company announced that its marketing alliance with Amazon.com would end, (Amazon had been essentially acting as Borders' online component.) and subsequently launched its own web sales site.^[7]

In 2008, Borders signed an agreement with Lulu Press to create "Borders Personal Publishing". Through this, authors can self-publish their work through Borders and its website, and it is all "powered by Lulu". Most services provided through Borders Personal Publishing are also available through a regular Lulu publishing package.^[8]

[edit] See also

The Borders Book and Music store at the Severance Town Center, Cleveland Heights, Ohio.

• List of bookstore chains
• Paperchase
• Book Stacks Unlimited

[edit] References

[edit] External links

• Borders.com
• BordersStores.com.
• Official Waldenbooks and Borders Express
• Borders engages in self-censorship
• Paperchase, a Borders Group company