The Borders Group Inc. (Ann Arbor, Mich.) has announced it will close nearly half of its Waldenbooks stores and will probably sell most of its 73 superstores overseas.
The nation’s second-largest bookseller, which reported a fourth-quarter loss of $73.6 million, said it will better tailor its superstores to local markets. A new concept store prototype will be refined this year and is expected to make its debut in early 2008. It will cut the number of its Waldenbooks stores to about 300 by the end of next year (from 564 at the end of 2006).
Sales at Waldenbooks, a specialty retail chain primarily in shopping malls, were down 8.3 percent in the fourth quarter and 10.9 percent for the full year. Borders closed 124 of its Waldenbooks stores in 2006. The goal is to close an additional 250 underperforming stores by the end of 2008.
The reorganization would put much of the company’s focus on its roughly 500 domestic superstores. A new technology-heavy concept store that has been in development since late 2006 will open in early 2008.
Borders also promised to introduce “digital centers” in its stores that will allow customers to buy audio books, MP3 players and electronic books.
“Clearly, our 2006 results were disappointing, as our company and the industry as a whole continued to face a challenging environment,” said ceo George Jones, “and it’s not where Borders Group is headed in the long run.” Jones, a former ceo of the Saks Department Store Group (Birmingham, Ala.), was appointed Borders' chief executive in July 2006.
Borders will also sever its relationship with Amazon.com Inc. (Seattle) and start its own online retail site. The retailer is working on its own Borders.com e-commerce web site and plans to publish exclusive books by celebrities, first-time authors and others under the Borders name.
Since 2001, Borders.com has taken shoppers to a site partnered with Amazon, while a web site for its stores allows shoppers to check inventories and reserve items. The company expects the new Borders.com, under development since the fall, to launch early next year and be independently profitable in 2009.
“We need to reinvent our business to exploit the rapid changes taking place in how consumers access information and entertainment,” said Jones. “Our ultimate goal is to make Borders a vital community gathering place where people come together to see, touch, interact and learn — online and in-store.”
Borders said it is exploring strategic alternatives for most of its international unit, including its United Kingdom, Ireland, Australia and New Zealand superstores and Books etc. business. Strategic alternatives often can include a sale of assets.
The effort doesn’t include the company’s Paperchase business, Puerto Rico stores or franchise operations in Malaysia and the United Arab Emirates. Borders also said its operations in Singapore will be maintained to support franchises.