Borders Replaces its Chief Executive

Borders Group Inc. (Ann Arbor, Mich.) has replaced its ceo, George Jones, at the same time it announced an 11.7 percent drop in holiday sales. Succeeding Jones at the troubled big-box book retailer will be Ron Marshall, most recently a principal of Wildridge Capital Management (Edina, Minn.), a private equity firm he founded.

During Jones’ two-year tenure as Borders chief, the company has been struggling against competition from online retailers and mass merchandise big-box stores and posted losses for both of the last two years. In March 2008, Borders hired investment banks to advise it on a potential sale. In November, it said it had shelved those plans.

Before beginning Wildridge Capital in 2006, Marshall was ceo of the Nash-Finch Co. (Minneapolis), a food distribution firm, where he is credited with quadrupling earnings over a six-year period. He was also cfo of Pathmark Stores Inc. (Carteret, N.J.) and in the late 1980s and early 1990s worked in senior management at the college bookstore division of Barnes & Noble Inc. (New York).

Borders chairman Larry Pollock said the company has reduced debt and improved margins, cash flow and inventory control, but “it is imperative that the company more aggressively attack these initiatives to address its long-term future.”

In other management changes, Mark Bierley was promoted to cfo and Anne Kubek was appointed executive vp, merchandising and marketing. She had been senior vp, stores.

Earlier this week, Borders reported that holiday sales for the nine-week period ending Jan. 3, 2009, dropped 11.7 percent. In December 2008, it announced that it had extended its deadline for repaying a $42.5 million loan.

“Borders is a powerful brand with millions of loyal customers who love to shop in the stores,” said Marshall. “These are tremendous assets that can be built upon once the balance sheet is strengthened and the company is on more solid financial footing. I've led turnarounds at other retail organizations and look forward to leading a new management team at Borders to drive profitability and help ensure lasting success for this great name in retail.”