Putting more profits on the books
TEXT OF STORY
Bill Radke: Another major American retailer reports earnings today — Borders Books. Its rival, Barnes & Noble, reported a loss last week. Borders is hoping some new managers, from outside the book world can revive its faded business. Marketplace’s Amy Scott reports.
Amy Scott: Borders’ fate rests in the hands of two finance guys. The new CEO comes from private equity. The chairman is an ex-hedge fund exec.
Lou Kasman: From the financial standpoint, hopefully these guys know how to turn around a business.
That’s longtime Borders stockholder Lou Kasman. He’s not convinced the new bosses know how to run a book business at a time when more people are buying at Wal-Mart or reading electronic books.
The new management plans to scale back music sales and slash costs. Analyst Michael Norris with Simba Information says that won’t be enough.
Michael Norris: I just worry that they don’t have, you know, their finger on the pulse of what book retailing and bookselling actually is. Because you can’t cost-cut your way to prosperity in the book business.
Norris says Borders needs to take a page from independent booksellers. That may mean deploying weapons rarely used in the cutthroat world of high-finance — down-home events like readings and cooking demonstrations that draw people into the stores.
I’m Amy Scott for Marketplace.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
