bookseller analyst's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/180216/comments http://seekingalpha.com/article/129061-borders-turnaround-is-happening-despite-downturn?source=feed#comment-449532 449532
You don't have sales if you don't have inventory.

They have also cut payroll by eliminating managers and supervisors which means customer service is suffering.

They are still heavily discounting and as their inventory shrinks this becomes a bigger and bigger problem. Since they discount new titles so heavily, they depend on backlist for profit. If they cut the backlist, where is the profit?

Their only remaining strategy would be to become the best bookstore around. The only way to accomplish that is to INCREASE inventory and INCREASE payroll. That would add to the debt.

So, what is the answer?

I am not really surprised that the street bought into their press releases and spin. The street wants to believe, just as their lackey Todd Sullivan wishes and wished that his BGP investment comes back. I hope he bought at 38 cents. But sell now! The next quarter will be very ugly.]]> Thu, 02 Apr 2009 13:09:30 -0400
You don't have sales if you don't have inventory.

They have also cut payroll by eliminating managers and supervisors which means customer service is suffering.

They are still heavily discounting and as their inventory shrinks this becomes a bigger and bigger problem. Since they discount new titles so heavily, they depend on backlist for profit. If they cut the backlist, where is the profit?

Their only remaining strategy would be to become the best bookstore around. The only way to accomplish that is to INCREASE inventory and INCREASE payroll. That would add to the debt.

So, what is the answer?

I am not really surprised that the street bought into their press releases and spin. The street wants to believe, just as their lackey Todd Sullivan wishes and wished that his BGP investment comes back. I hope he bought at 38 cents. But sell now! The next quarter will be very ugly.]]> http://seekingalpha.com/article/113260-borders-changes-around-management-wants-an-aggressive-turnaround?source=feed#comment-347015 347015
The new CEO will find that the book industry is not food, just as it was not a department store for George Jones. His experience at Crown might help: they found an ignominious end after a poorly executed master strategy.

Mr. Sullivan I was hoping that you made a new year's resolution to give us worthwhile information.]]> Mon, 05 Jan 2009 23:08:06 -0500
The new CEO will find that the book industry is not food, just as it was not a department store for George Jones. His experience at Crown might help: they found an ignominious end after a poorly executed master strategy.

Mr. Sullivan I was hoping that you made a new year's resolution to give us worthwhile information.]]> http://seekingalpha.com/article/112230-fear-and-loathing-in-2009?source=feed#comment-337665 337665 BGP) is feast or famine. I think it will be fine but it will take time...CEO George Jones is doing everything right and Ackman will buy it before he lets it fold."

How will it be fine? Its market cap is now hover in the $20 million arena, the debt is increasing, its website isn't performing, inventory in stores is too low, sales are terrible, the company has no strategic plan, it has sacrificed valuable employees.

What is George Jones doing right? The problems may not be entirely his fault, but the ompany was moving in a positive direction when he took over and he failed to capitalize on one single strategic plan. On can partially blame "the economy," but, again, Jones had his chance.

Ackman made a bad investment and he will wind up with a company that will have to completely re-invent itself to survive.

Borders has effectively taken itself out of the CD and DVD markets and has drastically cut back on its book backlist.

What is the advantage of a book superstore over Walmart, Best Buy, Costco? The depth of its stock, the knowledge of its employees and the atmosphere it creates.

Borders had all that, but it is gone. It has given the backstock business to Amazon, the besteseller business to Walmart, Target, Best Buy, Costco.

It has lost many experienced, knowledgeable employees.

Th atmosphere now resembles that of a Dollar Store.

It has had its opportunities. It has had the Sony Reader for over a year and never did a single thing to market it. It is probably a better product than the Kimble and has the advantage over Amazon where the customer can go into a store and try it out. Now it is sharing th market with Target and Sams Club.

Mr. Sullivan, if you were Mr. Ackman, how would you turn around Borders? The Concept Store is a pipe dream. They may look nice, but they are not going to increase sales per square foot over the old days. Why will people go into a store to download anything when they an sit at home and do it? Why would a company invest in bricks and mortar when they can sell downloads from a website?

The ultimate question Mr. Sullivan is how much credibility do you have left? You do not provide specifics for anything. We are supposed to take you at your word that you are an all-knowing, all-seeing deity and we are supposed to trust you?

Are you still buying BGP? How much do you own? What are you going to do? Since you lack any specifis in your writing at least give us some transparency in your actions.



]]> Wed, 24 Dec 2008 13:23:02 -0500 BGP) is feast or famine. I think it will be fine but it will take time...CEO George Jones is doing everything right and Ackman will buy it before he lets it fold."

How will it be fine? Its market cap is now hover in the $20 million arena, the debt is increasing, its website isn't performing, inventory in stores is too low, sales are terrible, the company has no strategic plan, it has sacrificed valuable employees.

What is George Jones doing right? The problems may not be entirely his fault, but the ompany was moving in a positive direction when he took over and he failed to capitalize on one single strategic plan. On can partially blame "the economy," but, again, Jones had his chance.

Ackman made a bad investment and he will wind up with a company that will have to completely re-invent itself to survive.

Borders has effectively taken itself out of the CD and DVD markets and has drastically cut back on its book backlist.

What is the advantage of a book superstore over Walmart, Best Buy, Costco? The depth of its stock, the knowledge of its employees and the atmosphere it creates.

Borders had all that, but it is gone. It has given the backstock business to Amazon, the besteseller business to Walmart, Target, Best Buy, Costco.

It has lost many experienced, knowledgeable employees.

Th atmosphere now resembles that of a Dollar Store.

It has had its opportunities. It has had the Sony Reader for over a year and never did a single thing to market it. It is probably a better product than the Kimble and has the advantage over Amazon where the customer can go into a store and try it out. Now it is sharing th market with Target and Sams Club.

Mr. Sullivan, if you were Mr. Ackman, how would you turn around Borders? The Concept Store is a pipe dream. They may look nice, but they are not going to increase sales per square foot over the old days. Why will people go into a store to download anything when they an sit at home and do it? Why would a company invest in bricks and mortar when they can sell downloads from a website?

The ultimate question Mr. Sullivan is how much credibility do you have left? You do not provide specifics for anything. We are supposed to take you at your word that you are an all-knowing, all-seeing deity and we are supposed to trust you?

Are you still buying BGP? How much do you own? What are you going to do? Since you lack any specifis in your writing at least give us some transparency in your actions.



]]> http://seekingalpha.com/article/111083-borders-alternate-model-makes-sense?source=feed#comment-333023 333023
Buying books on a non-returnable basis has been offered for years as an option by some publishers. As a system it has been tried off and on since the 1970s--remember "Remainder in Place?"

Borders said it wanted to try print-on-demand in their stores. That would be truly revolutionary--one at a time printing. But, of course, they overwhelmed any strategies thay had to go coupon for coupon with B&N.

The problem with non-returnable books is that it mostly affects the very top projected sellers. Say Borders buys 100 copies per store of the latest mega seller by one of the tree-burning authors--and the books bombs--Borders gets credit and the publisher sell it to a remainder house. Borders uses that money to pay its bill.

Publishers have been notoriously slow to reprint books because of returns, so this new plan is going to make buying a lot more difficult and could ultimately raise the price of remainders.

It will also have a profound affect on midlist books where publishers and booksellers take a chance and depend on word of mouth for publicity.

Borders has reduced their stock so much they resemble the defunct Crown Books.

It would be really nice for Mr. Sullivan to actually do some homework so he could honestly analyze a situation. People wonder how they get suckered by bad investments and all you have to look at what passes for financial journalism now. How many writers even know now what credit default swaps are? Here we have a story written by someone owning Borders stock that has absolutely no value.

It is not an honest analysis, but a reaction to an unchecked press release. As the first commnter suggests, this si a So What story.]]> Thu, 18 Dec 2008 10:24:17 -0500
Buying books on a non-returnable basis has been offered for years as an option by some publishers. As a system it has been tried off and on since the 1970s--remember "Remainder in Place?"

Borders said it wanted to try print-on-demand in their stores. That would be truly revolutionary--one at a time printing. But, of course, they overwhelmed any strategies thay had to go coupon for coupon with B&N.

The problem with non-returnable books is that it mostly affects the very top projected sellers. Say Borders buys 100 copies per store of the latest mega seller by one of the tree-burning authors--and the books bombs--Borders gets credit and the publisher sell it to a remainder house. Borders uses that money to pay its bill.

Publishers have been notoriously slow to reprint books because of returns, so this new plan is going to make buying a lot more difficult and could ultimately raise the price of remainders.

It will also have a profound affect on midlist books where publishers and booksellers take a chance and depend on word of mouth for publicity.

Borders has reduced their stock so much they resemble the defunct Crown Books.

It would be really nice for Mr. Sullivan to actually do some homework so he could honestly analyze a situation. People wonder how they get suckered by bad investments and all you have to look at what passes for financial journalism now. How many writers even know now what credit default swaps are? Here we have a story written by someone owning Borders stock that has absolutely no value.

It is not an honest analysis, but a reaction to an unchecked press release. As the first commnter suggests, this si a So What story.]]> http://seekingalpha.com/article/108719-borders-ceo-jones-not-responsible-for-sins-of-the-previous-management?source=feed#comment-321880 321880
I guess the market is sophmoric (sic) too. What is Borders doing right? If you feel so strongly, the stock is 66 cents--be my guest.


On Dec 05 08:04 AM sourgapes wrote:

> I believe all of these posts (like e-gal admits) are from sophmoric
> people who once worked in a Borders Retail store and are just ticked
> off.]]> Fri, 05 Dec 2008 13:30:27 -0500
I guess the market is sophmoric (sic) too. What is Borders doing right? If you feel so strongly, the stock is 66 cents--be my guest.


On Dec 05 08:04 AM sourgapes wrote:

> I believe all of these posts (like e-gal admits) are from sophmoric
> people who once worked in a Borders Retail store and are just ticked
> off.]]> http://seekingalpha.com/article/108719-borders-ceo-jones-not-responsible-for-sins-of-the-previous-management?source=feed#comment-319287 319287
They paid down their debt by returning merchandise. Books, CDs and DVDs are basically bought on consignment from publishers and distributors. Smaller bookstores have done this for years: returned merchandise for credit to keep new merchandise rolling in. Borders mortgaged its future with draconian cuts in inventory. This ensured lower sales. At the same time Borders cut already low staff hours and cut positions from stores. This reduced customer service.

Borders has engaged in a discount war with Barnes and Noble and Borders will lose that war since B&N has the cash to survive.

Borders also brought out their new e-commerce site a day late and a dollar short. Instead of just rolling out a competent site it added a Magic Bookshelf that delayed the rollout and cost the company cash and sales.

Borders has mismanaged its inventory horribly and is now ill-positioned to have anything but have a dismal 4th quarter.

I do not believe the concept stores are ore profitable for one second. It is a nice design but it is contrary to everything else Borders can do: more capital, more staff, more inventory.
Granted George Jones had a tough task when he took over but he has stumbled every inch of the way since. He can blame a poor macro-economy but he put the company in a terrible position.

Bill Ackman may have trusted Jones' judgment when he bought a third of the company for $12+ a share. I guess if he thought Borders was such a great buy he could now buy the other two-thirds.

Mr. Sullivan, if you think Borders is so great, buy it. I have a 40% off coupon.]]> Tue, 02 Dec 2008 18:43:20 -0500
They paid down their debt by returning merchandise. Books, CDs and DVDs are basically bought on consignment from publishers and distributors. Smaller bookstores have done this for years: returned merchandise for credit to keep new merchandise rolling in. Borders mortgaged its future with draconian cuts in inventory. This ensured lower sales. At the same time Borders cut already low staff hours and cut positions from stores. This reduced customer service.

Borders has engaged in a discount war with Barnes and Noble and Borders will lose that war since B&N has the cash to survive.

Borders also brought out their new e-commerce site a day late and a dollar short. Instead of just rolling out a competent site it added a Magic Bookshelf that delayed the rollout and cost the company cash and sales.

Borders has mismanaged its inventory horribly and is now ill-positioned to have anything but have a dismal 4th quarter.

I do not believe the concept stores are ore profitable for one second. It is a nice design but it is contrary to everything else Borders can do: more capital, more staff, more inventory.
Granted George Jones had a tough task when he took over but he has stumbled every inch of the way since. He can blame a poor macro-economy but he put the company in a terrible position.

Bill Ackman may have trusted Jones' judgment when he bought a third of the company for $12+ a share. I guess if he thought Borders was such a great buy he could now buy the other two-thirds.

Mr. Sullivan, if you think Borders is so great, buy it. I have a 40% off coupon.]]> http://seekingalpha.com/article/108082-initial-thoughts-on-borders-q3-results?source=feed#comment-315461 315461
It has also made extreme cuts in payroll hours and employee benefits which may have contributed to better cashflow.

All these tactics have led to lower traffic, poor sales and a dull future. Bookstores cannot survive without adequate inventory. If you measure the average Borders to the average B&N you will see empty Borders stores.

Borders turnaround has nothing to do with the current climate. Since George Jones took over as CEO the company has spiraled downward abandoning strategies and falling into the discount war trap. This is a death knell--where is Crown Books now?

Borders tried to sell itself for almost a year with no apparent tire kickers. Now its market value is pathetic. On inventory and assets alone its market cap is a value.

]]> Wed, 26 Nov 2008 10:22:46 -0500
It has also made extreme cuts in payroll hours and employee benefits which may have contributed to better cashflow.

All these tactics have led to lower traffic, poor sales and a dull future. Bookstores cannot survive without adequate inventory. If you measure the average Borders to the average B&N you will see empty Borders stores.

Borders turnaround has nothing to do with the current climate. Since George Jones took over as CEO the company has spiraled downward abandoning strategies and falling into the discount war trap. This is a death knell--where is Crown Books now?

Borders tried to sell itself for almost a year with no apparent tire kickers. Now its market value is pathetic. On inventory and assets alone its market cap is a value.

]]> http://seekingalpha.com/article/98837-borders-interview-with-ceo-george-jones?source=feed#comment-282924 282924
I an say that Borders management is very out of touch with the real world. All investors have to do is read Borders last quarter press release. They will see it is pure fiction. Borders had what looked like a better quarter because it included the sale of its Australian stores as well as sharp cuts in inventory and payroll.

Borders has cut their inventory sharply in part to reduce their debt. They essentially have eliminated CD sales, only carrying top list titles. Likewise, DVD inventory has been cut sharply and book inventory was cut about 25%.

With Christmas approaching Borders is filling shelves again. That will again increase their debt. Their market cap is around $250 million and their debt is around $500 million.

They have cut hours in their stores so much they essentially have no customer service. While I worked there, payroll hours were low and they are significantly lower now.

George Jones talks about Borders commitment to the Sony Reader but that is a joke. No one is really trained in selling it and it is definitely not a promotional item. At $300 a pop you would think Borders would give its employees an incentive to sell it. It literally was thrown into the stores.

This company has no vision and no strategy. The concept stores basically change Borders to a Target style from whence George Jones came. You can't run a store like that with low payroll.

Both Borders and Barnes and Noble (and WalMart, Costco, etc.) don't realize is bookselling, more than any other retail reflects local taste. It's not just a local section, it's tailoring the store to local needs and employing people who know the merchandise.

If there is someone out there who understands book retailing on a local and national basis, who understands how to manage payroll and hire competent managers and employees, then Borders could be a bargain...But if a Wall Street type buys it---they better change their thinkig radically or their investment would be a waste.

My handicapping suggests the Borders name will be gone by February.
]]> Wed, 15 Oct 2008 11:05:51 -0400
I an say that Borders management is very out of touch with the real world. All investors have to do is read Borders last quarter press release. They will see it is pure fiction. Borders had what looked like a better quarter because it included the sale of its Australian stores as well as sharp cuts in inventory and payroll.

Borders has cut their inventory sharply in part to reduce their debt. They essentially have eliminated CD sales, only carrying top list titles. Likewise, DVD inventory has been cut sharply and book inventory was cut about 25%.

With Christmas approaching Borders is filling shelves again. That will again increase their debt. Their market cap is around $250 million and their debt is around $500 million.

They have cut hours in their stores so much they essentially have no customer service. While I worked there, payroll hours were low and they are significantly lower now.

George Jones talks about Borders commitment to the Sony Reader but that is a joke. No one is really trained in selling it and it is definitely not a promotional item. At $300 a pop you would think Borders would give its employees an incentive to sell it. It literally was thrown into the stores.

This company has no vision and no strategy. The concept stores basically change Borders to a Target style from whence George Jones came. You can't run a store like that with low payroll.

Both Borders and Barnes and Noble (and WalMart, Costco, etc.) don't realize is bookselling, more than any other retail reflects local taste. It's not just a local section, it's tailoring the store to local needs and employing people who know the merchandise.

If there is someone out there who understands book retailing on a local and national basis, who understands how to manage payroll and hire competent managers and employees, then Borders could be a bargain...But if a Wall Street type buys it---they better change their thinkig radically or their investment would be a waste.

My handicapping suggests the Borders name will be gone by February.
]]> http://seekingalpha.com/article/72855-why-we-doubled-our-position-in-borders?source=feed#comment-153019 153019
Borders brought in George Jones to set a new strategic plan and turn things around, but now he is blaming the economy for Borders failures. I worked for Borders recently and have worked for other chains and independents and Borders has the weakest merchandising I have ever experienced. Their idea of a concept store is interesting but they promise high customer service yet have cut positions and payroll in their stores.

I can see no scenario that rescues Borders except that bookselling is a sexy business and may attract an MMTB investor (more money than brains). Where are B Dalton, Brentanos, Crown Books, Scribners, Doubleday now?]]> Fri, 18 Apr 2008 13:15:53 -0400
Borders brought in George Jones to set a new strategic plan and turn things around, but now he is blaming the economy for Borders failures. I worked for Borders recently and have worked for other chains and independents and Borders has the weakest merchandising I have ever experienced. Their idea of a concept store is interesting but they promise high customer service yet have cut positions and payroll in their stores.

I can see no scenario that rescues Borders except that bookselling is a sexy business and may attract an MMTB investor (more money than brains). Where are B Dalton, Brentanos, Crown Books, Scribners, Doubleday now?]]>