Putting more profits on the books

Amy Scott May 26, 2009
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Putting more profits on the books

Amy Scott May 26, 2009
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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.

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