Measure content performance. Develop and improve products. List of Partners vendors. Book Publishing Bookselling. By Valerie Peterson. Valerie Peterson wrote about publishing for The Balance Careers. She has worked at publishers including Random House and Doubleday and is an author herself.
Learn about our editorial policies. Your Privacy Rights. To change or withdraw your consent choices for TheBalanceCareers. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. These choices will be signaled globally to our partners and will not affect browsing data. The liquidated chain's last CEO opens up on just what went wrong — and what other retailers can take away. But the year-old retailer was crumbling fast beneath his feet.
Edwards was in New York that day to submit a plan of reorganization and refinancing for Borders Group Inc. Since filing for Chapter 11 bankruptcy in February , Edwards spent months courting investors, asking them to throw Borders' sinking business a buoy of capital. But at 5 p. Up to that point, Edwards maintained optimism that the once family-owned, Michigan-grown bookshop would emerge from its decline into bankruptcy.
Under the turnaround plan he was spearheading, the idea was that Borders would come out smaller yet profitable. Now, Edwards found himself coming back to Michigan empty-handed — unsure of what he would tell his waiting employees. Several years later, Kmart spun off its discount book chain Waldenbooks and Borders as a combined entity, calling it the Borders Group.
In its prime in , the company boasted over 1, domestic and international Borders and Waldenbooks stores. At the turn of the century, Borders made a fateful move that looks especially bad in hindsight: The retailer struck a deal with Amazon to sell its books online, and it wasn't too long afterward that the retailer began to struggle. In the mid s, the company's finances began to falter despite efforts to turn around the business, such as concept stores and a partnership with Starbucks.
Mike Edwards, a merchandising veteran with stints at Target and Lucy Activewear among others, first came to Borders in The retailer had already begun to shed hundreds of stores in its bid to stay afloat, and executives rotated in and out of the CEO position like a game of musical chairs. Soon, it would be Edwards' turn. On Jan. The board of directors then tapped Edwards, an executive vice president and chief merchandising officer at the time, to temporarily take over the role.
Edwards became the company's fourth CEO in five years. The company badly needed to stabilize its balance sheet and Edwards was set on making that his number one priority — it all seemed like a pretty simple task to him at the time. If Borders was a traditional turnaround story, he thought, the retailer would need to downsize its store footprint and tune up its operations.
Amazon released its first Kindle e-reader in and it sold out within hours. With sales migrating online, Edwards realized that every Borders store — 25, square feet on average — had about 10, square feet too many.
Managing a company on the brink of bankruptcy teaches you a lot about leadership, he said. For him, the process was difficult, but Edwards said he tried to be transparent and emit a sense of urgency. He was blunt with employees, acknowledging that he ultimately could not predict the future. Some chose to leave; others yet were let go. By August , the retailer only had about workers left at its corporate office. The company has had four chief executive officers in the past three years and two chief financial officers in Sales declined by double-digit percentage rates in , and in the first three fiscal quarters of In bankruptcy, stockholders are typically wiped out.
Its second-largest shareholder is hedge fund Pershing Square, whose manager, William Ackman, has said Borders was his worst investment ever. Borders shares were trading over-the-counter on Wednesday afternoon at around 21 cents, down 7. Timeline: A short history of Borders Group bookstores. Borders' landlords wait for bankruptcy outcome.
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