Retailers, consumers and prices
The No. 2 U.S. bookstore chain’s electronic bookstore comes nine months after rival Barnes & Noble debuted its Nook e-reader and three months after Apple introduced its popular iPad tablet computer, allowing both companies, and Amazon.com, which sells the Kindle e-reader, to get a head start.
No worries, says Borders, which saw sales at its namesake superstores open at least a year and on its website fall 11.4 percent in the first quarter.
“We’ll take market share just by turning it on,” said Mike Edwards, president of Borders Inc, the company’s main operating business.
Edwards said Borders had data and email addresses for the 38 million customers in its loyalty program and about 700 stores at which to promote its virtual bookstore, which will help it catch up. The company’s goal is to secure a 17 percent share of the e-book market by July 2011.
Check out who’s making a bet on Borders, the struggling bookseller.
Financier Bennett LeBow, chairman of tobacco holding company Vector Group Ltd, is buying 11.1 million Borders shares through a company he controls — making him Borders’ single largest shareholder.
Borders CEO Mike Edwards praised LeBow’s turnaround prowess- fair enough. If you can help tabacco companies, you can probably help any ailing company.
Check out the new guy in charge at Barnes & Noble.
On Thursday, Barnes & Noble named William Lynch, the (young) father of its Nook e-reader, as its new chief executive. Outgoing CEO Stephen Riggio — the chairman and founder’s brother — is sticking around as a vice chairman.
Barnes & Noble appears to be betting that the Nook will be a prime source of future growth. Lynch, 39, called e-books “key to our future” during a morning conference call.
Check out Borders’ poor 2009 holiday sales numbers.
The No 2 U.S. bricks-and-mortar bookseller disclosed its how sharply sales fell during the disastrous 2009 holiday season on Monday (apparently hoping no one would notice on the Martin Luther King Jr holiday, with the markets closed). It is hardly the kind of news Borders needs after it has been lambasted by investors and analysts alike for coming so very late to the e-books reader game.
Borders said comparable sales at its superstores fell 14.6 percent in the 11-week period ended Jan. 16. (To be fair, excluding weak sales in items such as music and video, which Borders is moving away from, sales were down 10.9 percent.) How did it stack up against its biggest rival? Barnes & Noble’s same-store sales fell 5.4 percent in the nine weeks ended on Jan 2.
Borders dumped Chief Executive George Jones less than three years after he joined the No. 2 U.S. specialty bookseller, replacing him with a private equity executive with experience turning around ailing companies. The company, which reported a sales decline of almost 12 percent during the holiday shopping season, also named a new chief financial officer as well as replacing its executive vice president for merchandising and marketing.
In November, Borders said it was no longer pursuing a possible sale of the company even as it posted a larger-than-expected operating loss.
Anyone who listens to earnings conference calls (we at Reuters Shop Talk listen to dozens each quarter) knows they can drag on … and on … and on.
But these days, some companies have less to say since they’re not giving guidance or they are keeping mum on their plans in this shrinking economy. Plus, with banks cutting jobs or closing down like Bear Stearns, there are fewer analysts around to ask questions at the end of the calls.
Check out a bunch of retail executives talking about the state of the industry, economy and the outlook for holiday shopping.
It’s the Reuters Consumer and Retail Summit, being held this week in New York, featuring top executives from Borders, Best Buy, Toys “R” Us, Jones Apparel, Perry Ellis and others.
The executives meet with Reuters reporters as most retailers are struggling to attract consumers that have been clobbered by $4-a-gallon gasoline, falling home prices, a credit crunch and rising food costs.
Sales got a bit of a boost in May as consumers started to spend their tax rebates. But analysts say that bump could be fleeting, with consumers still under pressure after the rebates have been spent.
To find out what retailers think, check out the Retail Summit page all week.
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Check out those coupons from Borders.
In a new report, J.P. Morgan analyst Charles Grom begins tracking the promotional cadence at book sellers. Grom said he is keeping a close eye on discounts and promotions as the price war among book retailers extends into the first half of 2008 and Borders prepares to launch its own e-commerce site.
The view so far? “Borders is still clearly focused on driving the top line, perhaps at the expense of margins, as it remains the most promotional retailer in bookselling today,” Grom wrote.
Borders averages about two coupons per week, with spikes in broad-based discounts during the holiday, quarter-end and month-end periods, Grom said. The company put more promotional focus on specific categories in February and March.
Barnes & Noble’s rewards program, unlike Borders’, is subscription based, with members paying $25 and receiving discounts,
“As such, Barnes & Noble’s direct marketing campaign serves more as a reminder of discounts rather than a limited time offer,” Grom said. But he added that he’s seen some special offers from Barnes over the past several weeks, including a 40-percent discount on kids’ books.
Grom sees the pace of discounts at Borders continuing in the first half as it ramps up e-commerce sales and faces macroeconomic headwinds.
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