burningprophets

Is Borders Cutting Inventory Too Much?

The results of the 2008 inventory reduction are here in black and white:

-10.8%: Comp-store decline of superstores, 2008

-8.2%: Comp-store decline of books, 2008

$166.5 million: Reduction in book inventory, 2008

~from PW, "Borders Books by the Numbers"

But don't worry: Marshall is just going to whip the stores with threats, write-ups, and terminations until ALL we are selling are the new "make" books. Nothing else matters besides selling "City of Thieves" and "The Middle Place"; sales of these titles are the only measurement by which the stores are now judged.


On Apr 04 07:15 PM User 283977 wrote:

> This is a classic example of what is wrong with executive management
> teams in many companies today. The discussion focuses entirely on
> the economic benefits of reducing inventory costs which results in
> cash flow increases. In other words, they want to reduce the average
> shelf time for their titles. They also want to reduce their order
> cycle times, and even mention the business buzz term "just in time"
> inventory system. This all sounds wonderful… but what is glaringly
> missing from the discussion is what do the Borders customers think
> of these changes?
>
> What are the customer centric consequences of reducing in-store inventories
> to mostly best selling titles? If less traffic enters the store,
> how much impulse buying will be reduced? Many people don't go into
> a books store to purchase a specific title, they go in to browse,
> they go in to look at shelves of books in specific areas. Many of
> the more expensive books carried by book stores do not blow off the
> shelves. My guess is that the average profit per sold title would
> drop as a result of only carrying a limited selection of "best sellers".
> If I can't get my hand on the title today, why not just buy it on
> Amazon?
>
> Just in time supply systems works well in manufacturing because you
> know how many units you plan to build. With the exception of books
> such as the Harry Potter series, its very difficult to know the demand
> for most book titles in advance, so you run the risk of missing a
> portion of the first wave of sales for a surprise best seller. The
> second goal of reducing the shelf time for titles means they intend
> to mostly carry books that inherently move rapidly. That pretty much
> eliminates a good portion of highly expensive, highly profitable
> titles that move slower, and who's sales are highly dependent on
> the presence of a substantial number of IN-STORE titles in the same
> subject area.
>
> Amazon is killing these guys with inventory. The challenge to Borders
> and Barnes & Noble is to INCREASE store traffic. They need to
> increase the number of eyes and wallets in the store. Local stores
> have huge advantages over Amazon because of zero shipping costs,
> the ability to hold and touch the books, the ability to make an impulse
> purchase and take it home NOW, and the presence of knowledgeable
> and personable sales staff. Having a great snack bar with comfortable
> seating and low priced goodies also brings people in the store, and
> that is the name of the business in retail sales. Add to that an
> inventory of books oriented to needs and wants in their selling area,
> and stores designed to increase social meetings in particular subject
> areas and you have a business strategy oriented towards maximizing
> customer satisfaction. If you manage to maximizing customer satisfaction
> in each selling area, profitability will increase. Cutting inventories
> is an inherently defensive business strategy and will very likely
> result in a spiral of lost customers and ultimate bankruptcy.
>
> I used to spend a lot of money in Borders on technical books. They
> reduced their inventories, and as a result, I have not been in a
> Borders for quite some time.

Borders Alternate Model Makes Sense

Sullivan's myopic take on Borders discredits this entire website for me. When I first ran across one of his articles, I was astounded at his naivete with regard to the book business; but I was even more astounded by his blatantly apologist tone. He's a high profile penny stock pumper. And it doesn't look like anyone else is paying attention to his drivel either: BGP closed at .51 today.

Borders: CEO Jones Not Responsible for Sins of the Previous Management

"...sophmoric (sic) people who once worked in a Borders.."

Twisted logic from you. Why would you believe in the success of a company that employed such people? Your post lacks content; just supposition, and judgment of other posters' content. Write your own bull opinion. Waiting to hear it.

Borders: CEO Jones Not Responsible for Sins of the Previous Management

I have to agree with the previous posts. Mr. Sullivan, you are nothing but an apologist for this company. You have demonstrated an utter lack of understanding (intentional?) of the retail book business in your myopic, soporific articles on Borders. Therefore, I don't trust anything you see fit to print.

Borders: Interview with CEO George Jones

"We’ve stated that we will trim $120 million in annual expenses as part of a new base operating model for our company, realizing $60 million of that yet this year. It’s a permanent savings—100% of it." ~George Jones

i guess that means that the suspension of the company match on my 401(k) is "permanent". funny, we were all told it would be "reviewed on a quarterly basis". in fact, they posted a notice about the "continuation of the suspension" after the second quarter.

well, at least i don't have to wait till next week to find out what the outcome of the next "review" will be--now i know it's all just blowing smoke...