bookseller analyst

Fear and Loathing in 2009

Mr. Sullivan, how can a responsible journalist write:"Borders (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.