Unstructured Finance

Check Out Line: Borders launches e-bookstore … finally

bgp1Check out Borders Group finally launching its e-bookstore.

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.

“A lot of people have said, ‘You’re kind of late to the game,’ and I’m saying, ‘the game actually just started,’” Edwards said.

Check Out Line: Betting on Borders

lebowCheck 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.

Borders said it would use some of the money from LeBow to raise its profile in the fast-growing electronic books market. The No. 2 specialty bookstore chain expects to debut its e-bookstore, powered by  Kobo in June. Kobo’s reader which will prominently feature Borders’ ebookstore, faces fierce competition from the likes of Amazon’s Kindle, Apple’s iPad and Sony’s Reader.

Check Out Line: The latest bookseller boss shakeup

EARNINGS/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.

Lynch’s appointment comes less than two months after smaller rival Borders saw its CEO leave after a year.

Check Out Line: Borders had a lousy Christmas

BORDERSBOOKSCheck 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 CEO Ron Marshall said he was “disappointed” with the results. Maybe he should also be worried. A year earlier, a decent holiday season allowed the company to have its only profitable quarter in fiscal 2009. (For now, though, analysts seem to think Borders made money during the holidays despite dwindling sales, according to Thomson Reuters I/B/E/S.)

DealZone Daily

Auto maker General Motors is grappling with the future of its European units Saab and Opel after one sale collapsed and the other was pulled, targeting the bulk of its 9,000 job cuts at Opel’s German factories.

Bookseller Borders UK called in the administrators yesterday, adding its name to a growing list of failed British high street retailers. Administrator MCR is hoping to sell the business, bought by Valco (the private equity arm of turnaround specialist Hilco) in July this year, as a going concern.

Lachlan Murdoch, son of News Corp chief executive Rupert Murdoch, sold some $27.6 million of his shares in his father’s company as he bought 50 percent of Daily Mail & General Trust’s radio operations in Australia.

Check Out Line: More bad news for books and drug stores

Check Out some weakness in book and drug stores sales.

Borders dumped Chief Executive George Jones less than threejones2 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.

Meanwhile, same-store sales at drug stores were not what those retailers were hoping for. Walgreen, which saw sales at store open at least a year rise 4.9 percent in December, said shoppers focused on basic necessities, while staying away from seasonal items. Rite Aid‘s same-store sales in the same period slipped 0.2 percent.

Check Out Line: Fewer analysts = shorter calls

Check Out those quick corporate conference calls.

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.

Borders had a conference call that clocked in at about half an hour on Friday morning, complete with questions from just two analysts.  During the previous two Borders quarterly calls four analysts questioned the bookseller.  Back in March, seven analysts piped in.  The company was also pretty quiet about its plans, choosing not to elaborate on financing talks with shareholder Pershing Square.

Turning the page on Borders

Barnes & NobleBarnes & Noble Inc reportedly has read the market and decided to turn the page on an acquisition of rival Borders Group Inc. The largest U.S. specialty bookseller, which had been looking into a bid for Borders, is likely to take a pass because of tight lending markets that would make it difficult to arrange bank financing, the Wall Street Journal said, citing people familiar with the situation. Borders, which put itself up for sale in March, has struggled with liquidity issues and has been closing underperforming stores and taking other steps to turn around its business.

Reuters’ DealTalk columnists report that overseas metal and mining companies may have U.S. coal assets in their sights. Indian and Russian firms in particular are looking to snap up assets in order to gain a foothold in the U.S. metallurgical coal market, DealTalk says. Metallurgical coal, also called met or coking coal, is used to make coke, the material used to fuel blast furnaces at steel mills. Two assets that could be on the market are privately owned U.S. coal producers United Coal and Bluestone, one source familiar with the matter said.

Shares in Impala Platinum (Implats), the world’s No. 2 producer of the precious metal, raced 9 percent higher on Thursday partly boosted by market talk that BHP Billiton could make a $26 billion bid for the South African company. South African website www.Miningmx.com said BHP may soon have no choice but to make an offer of at least 200 billion rand ($25.65 billion) for Implats. The article said BHP, the world’s largest producer of metals and minerals, had the world’s best and most diversified portfolio of assets in the resources sector — with the exception of platinum, to which it has no exposure. “At the moment it is pure speculation, but yes, for sure the speculation is affecting the (share) price,” Roy Lamb, a trader at Investec Securities in Johannesburg said. BHP declined to comment.

Check Out Line: It’s the Reuters Retail Summit

clothes.jpgCheck 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.
Also in the basket:
InBev cautions Bid about striking Modelo deal
Trust chairman sees change, but no sale, at Hershey
CostPlus rejects Pier 1 acquisition offer
Starbucks says international growth to cushion U.S. weakness
(Photo: Reuters)

Check Out Line: Battling booksellers

books.jpgCheck 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.
Also in the basket:
The latest in fashion: pink slips (NYTimes)
Wendy’s reports lower quarterly same-store sales
Constellation Brands profit tops view

 (Photo: Reuters)