Borders replaces chairman with ex-investor partner
Book chain has new senior management after poor holiday sales
By Danny King -- Video Business, 1/13/2009
JAN. 13 | Borders Group, the No. 2 U.S. bookstore chain behind Barnes & Noble, replaced its chairman a week after it brought in new senior management and reported that its same-store sales plunged during the holidays.
Richard “Mick” McGuire, a former managing partner of Borders’ largest shareholder Pershing Square Capital Management, is replacing Larry Pollock, who has been chairman for three years and has been on Borders’ board since 1995, the company said in a statement today. Pollock, 61, will remain a board member.
Borders last week replaced its chief executive and chief financial officers after reporting that holiday same-store sales dropped 14% from a year earlier. CEO George Jones, who has run the company since July 2006, was replaced by Ron Marshall, former CEO of food distributor Nash Finch Co. and founder of private-equity firm Wildridge Capital Management. Mark Bierley, Borders’ senior VP of finance, replaced chief financial officer Ed Wilhelm, who has been the company’s financial chief for eight years.
McGuire, 32, who joined Borders’ board a year ago, is leaving Pershing Square “to pursue entrepreneurial interests,” the company said.
“Mick is extremely smart and capable,” Pershing Square CEO Bill Ackman said in the statement. “As a major shareholder of Borders, I am delighted with Mick’s appointment to chairman.”
Borders’ finances have been suffering as the combination of less foot traffic and slumping music sales has pulled down same-store revenue. The company, which has tried to cut operating costs and debt by reducing inventory and cutting floor space dedicated to lower-margin categories such as music, said in November that its loss for the quarter ended Nov. 1 widened by 8.9% while sales fell 10%.
Borders last March hired J.P. Morgan and Merrill Lynch to assess strategic alternatives, including a possible sale. The company in November said it’s no longer considering selling the company, though it may still sell its Paperchase Products stationary unit to Pershing Square for $65 million.
