Struggling Borders to Meet With Publishers
By Julie Bosman/NYT
The book chain Borders entered 2011 on an unsteady note, telling major
publishers last week that it would delay payments owed to them, and
stoking fears that it would not be able to recover from declining
sales.
On Monday, Borders executives said they would discuss the company's
plans with publishers at hastily arranged meetings in New York later
this week. Mike Edwards, the president and chief executive of Borders,
will be present at the meetings. They will enter the talks without two
top Borders executives whose resignations were announced on Monday:
Thomas D. Carney, the company's general counsel; and Scott Laverty,
the chief information officer.
A spokesperson said the company was not in a liquidity crisis and that
its stores were well-stocked. Borders executives are in discussions
regarding potential refinancing, she said.
As digital books have risen in popularity, brick-and-mortar bookstores
have appeared increasingly vulnerable, and many publishing executives
believe their numbers will decrease in the coming years. For months,
publishers have been especially worried about the health of Borders,
which has suffered from losses in revenue for years and reported
dismal third-quarter earnings in December.
If the bookseller were to go out of business, publishers could lose
tens of millions of dollars, miles of shelf space and the selling
power of more than 675 retail stores. Industry analysts said a
bankruptcy filing from Borders seemed more likely than ever.
Some book chains have broadened their merchandise to go beyond just
selling books, devoting significant space to toys and games for
children and a selection of electronic readers like the Nook, from
Barnes & Noble, and the Kobo, offered by Borders.
Borders lagged Barnes & Noble in establishing its digital book
business and has been threatened by competition from Amazon.com and
big-box discount stores. Peter Wahlstrom, a retail analyst for
Morningstar Equity Research, said Borders had been badly hurt by a
decline in sales of printed books."Book sales have been either flat or
down in the last several years," he said.
Barnes & Noble, sounding cheery, said on Monday that it achieved
"record-setting" sales this holiday season, an increase of 9.7 percent
in the nine-week period ending Jan. 1. The boom was partly created by
demand for the chain's dedicated e-readers, the Nook and Nook Color.
A spokesman for Ingram Book Company, a major book wholesaler, said on
Monday the company was still shipping books to Borders, despite the
bookseller's troubles, but at least one other supplier, the National
Book Network, said that it had halted shipments to Borders, first
reported in The Wall Street Journal.
"Most every publisher and distributor wants Borders to survive and
thrive, and we are no exception," said Skip Prichard, the president
and chief executive of the Ingram Content Group.
Borders, based in Ann Arbor, Mich., has 19,500 employees.
(Michael J. de la Merced contributed reporting.)
http://www.nytimes.com/2011/01/04/business/media/04borders.html?_r=1&ref=business
By Julie Bosman/NYT
The book chain Borders entered 2011 on an unsteady note, telling major
publishers last week that it would delay payments owed to them, and
stoking fears that it would not be able to recover from declining
sales.
On Monday, Borders executives said they would discuss the company's
plans with publishers at hastily arranged meetings in New York later
this week. Mike Edwards, the president and chief executive of Borders,
will be present at the meetings. They will enter the talks without two
top Borders executives whose resignations were announced on Monday:
Thomas D. Carney, the company's general counsel; and Scott Laverty,
the chief information officer.
A spokesperson said the company was not in a liquidity crisis and that
its stores were well-stocked. Borders executives are in discussions
regarding potential refinancing, she said.
As digital books have risen in popularity, brick-and-mortar bookstores
have appeared increasingly vulnerable, and many publishing executives
believe their numbers will decrease in the coming years. For months,
publishers have been especially worried about the health of Borders,
which has suffered from losses in revenue for years and reported
dismal third-quarter earnings in December.
If the bookseller were to go out of business, publishers could lose
tens of millions of dollars, miles of shelf space and the selling
power of more than 675 retail stores. Industry analysts said a
bankruptcy filing from Borders seemed more likely than ever.
Some book chains have broadened their merchandise to go beyond just
selling books, devoting significant space to toys and games for
children and a selection of electronic readers like the Nook, from
Barnes & Noble, and the Kobo, offered by Borders.
Borders lagged Barnes & Noble in establishing its digital book
business and has been threatened by competition from Amazon.com and
big-box discount stores. Peter Wahlstrom, a retail analyst for
Morningstar Equity Research, said Borders had been badly hurt by a
decline in sales of printed books."Book sales have been either flat or
down in the last several years," he said.
Barnes & Noble, sounding cheery, said on Monday that it achieved
"record-setting" sales this holiday season, an increase of 9.7 percent
in the nine-week period ending Jan. 1. The boom was partly created by
demand for the chain's dedicated e-readers, the Nook and Nook Color.
A spokesman for Ingram Book Company, a major book wholesaler, said on
Monday the company was still shipping books to Borders, despite the
bookseller's troubles, but at least one other supplier, the National
Book Network, said that it had halted shipments to Borders, first
reported in The Wall Street Journal.
"Most every publisher and distributor wants Borders to survive and
thrive, and we are no exception," said Skip Prichard, the president
and chief executive of the Ingram Content Group.
Borders, based in Ann Arbor, Mich., has 19,500 employees.
(Michael J. de la Merced contributed reporting.)
http://www.nytimes.com/2011/01/04/business/media/04borders.html?_r=1&ref=business
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