Spring Break!
To celebrate the spring equinox, Shelf Awareness is taking a long weekend and will return on Monday.
Also, today's issue was late in order to include information from Barnes & Noble and Borders. Our apologies!
See you next week!
To celebrate the spring equinox, Shelf Awareness is taking a long weekend and will return on Monday.
Also, today's issue was late in order to include information from Barnes & Noble and Borders. Our apologies!
See you next week!
Borders Group's new strategic plan, reflecting the thinking of CEO
George Jones, who joined the company last year, puts an emphasis on Borders's U.S. superstores, online selling,
new technology as well as merchandising and marketing initiatives.
Under the plan, Borders aims to sell most of its international stores;
end its outsourcing of online sales to Amazon.com; close nearly half of
its Walden stores; offer digital products, digital downloading and
personal publishing opportunities in stores and online; and build a
proprietary publishing operation, among other things.
"We need to reinvent our business to exploit the rapid changes taking
place in how consumers access information and entertainment," Jones
said in a statement. "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. . . . We have an opportunity
within our domestic superstore business to build on our key assets--a
powerful brand, a strong network of store locations, knowledgeable
employees and nearly 17 million loyal members of our Borders Rewards
program who love our superstores."
With the changes, the company will more broadly resemble archrival
Barnes & Noble, which has no stores abroad, a strong e-commerce
site and a proprietary publishing program that makes some traditional
publishers nervous.
Among the elements of the Borders plan:
International
The company will "explore strategic alternatives," i.e., try to sell,
most of its international operations, including its stores in the U.K.
(Books etc., too), Ireland, Australia and New Zealand. The anticipated
sales will not include franchised operations in Malaysia and the United
Arab Emirates, the Paperchase stationery business, Borders's Puerto
Rico stores or the Singapore store, which will be used to support
franchise operations, which the company wants to expand. It commented:
"The franchise model requires little capital investment
from Borders Group but yields high profit and growth opportunities."
Waldenbooks
During 2006, Borders closed 124 Waldenbooks Specialty Retail stores,
leaving it with 546 Walden stores. During the next two years, Borders intends
to close another 250 "under-performing" Walden stores, which will leave about
300 by the end of 2008. By comparison, at its height Waldenbooks had
well over 1,000 outlets across the country.
Online operations
Borders is developing its own e-commerce Web site, which it aims to
launch early next year. Among other things, Borders wants to use the
site to extend in-store programs to the Web and allow customers to use
existing in-store Borders Search computers for special ordering. In
addition, operating its own Web site will "allow the company to enable
key partnerships that will build incremental revenues and margins and
facilitate other technology and cross-channel opportunities."
Superstores
Borders is working on a new store prototype, the first of which should
open early next year. Elements of the new store design, which aims to
"bring together destination businesses, technology and experiential
elements," will be adapted to existing stores.
Borders will add digital centers in stores that will offer products
such as audiobooks, e-books and MP3 players as well as services such as
downloading and personal publishing. Digital downloading will be
available both online and in stores. Borders is talking with potential
partners about digital offerings.
The company will designate "destination businesses" in lifestyle and
other categories. Borders plans
to feature local and regional titles "on a store-by-store basis." In all stores, the
company is "maximizing key items, impulse items, feature tables, end
caps and queue lines" as well as "improving merchandising, assortment
planning, replenishment and supply chain effectiveness."
The company will open several freestanding Paperchase stores in the
U.S. this year. It called the Paperchase stationery company and
Seattle's Best Coffee businesses "successful at driving same-store
sales increases in their categories and . . . a solid return on
investment."
Borders Rewards
Borders hopes to increase revenue through partnerships with other
organizations as well as by using customer data to tailor promotions to
individual members. The company will soon institute modifications "to
improve the profitability" of the loyalty program, which has nearly
17 million members.
Publishing
"To distinguish the Borders brand and drive high margin sales," Borders
has already begun negotiating to publish titles by "celebrities,
undiscovered talents and others" that would be exclusive to Borders.
The company imagines that it can make many of the titles bestsellers.
According to today's Wall Street Journal, Borders is
talking with "heads of various Hollywood talent agencies." CEO George
Jones, who once was president of worldwide licensing and studio stores
at Warner Bros., told the paper, "There are a lot of great writers
writing for motion pictures and TV. Why not take the concepts offered
in good scripts and make them into a novel?"
Apparently the first fruit of these conversations is Slip and Fall, a thriller by TV writer Nick Santora that will be published on June 1.
Barnes & Noble today offered more information about results for the
fourth quarter and full year. Earlier this month, it announced sales
and other news (Shelf Awareness, March 5).
Preliminary net earnings in the fourth quarter ended February 3 rose 3%
to $127 million and preliminary net earnings for the full year rose 3%
to $150.8 million. It reaffirmed its prediction of a first quarter loss of eight to 12 cents a share.
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In the fourth quarter ended February 3, Borders sales rose 2.9% to $1.5
billion and the net loss was $73.6 million compared to net income of
$119.1 million in the fourth quarter of 2005. For the full fiscal year,
sales rose 0.8% to $4.06 billion and the net loss was $151.3 million
compared to net income of $101 million in 2005.
Sales at U.S. superstores rose 2.3% to $960.3 million in the fourth
quarter. Sales at stores open at least a year fell 2.8% in the quarter
and fell 2.2% for the full year. The company opened 13 Borders stores
during the year, ending with 499.
Waldenbooks sales dropped 8.3% to $286.4 million in the quarter and
fell 10.9% to $663.9 million for the year. Sales at stores open at
least a year fell 6.2% in the quarter and 7.5% for the year.
International sales in the quarter rose 22.5% to $249.6 million and for
the full year rose 12.8% to $650 million. Measured in local currencies,
sales at international stores open at least a year rose 0.3% in the
quarter and 0.4% for the year. The company noted that international
results were affected by "a challenging retail environment in the U.K.,
which improved somewhat in the fourth quarter." At the end of the
fiscal year, the company had 68 stores outside the U.S., the majority
in the U.K.
CEO George Jones commented, "Clearly our 2006 results were
disappointing, as our company and the industry as a whole continued to
face a challenging environment."
Borders announced that it will no longer issue guidance on future sales
or earnings or comment on estimates made by analysts or others--an
approach that some in business such as Warren Buffett have encouraged.
Nonetheless the company did describe 2007 as "a year of transforming
and stabilizing--but not significantly improving--financial
performance. Through execution of its strategic plan, management
anticipates returning to earnings per share growth in 2008, and
continued growth beyond that year."
The New England Independent Booksellers Association is moving its
fall trade show forward by a day, so that it will now run
Thursday-Saturday, September 27-29. The show will still be held in
Providence, R.I.
Thursday's schedule will include some traditional Friday events:
educational sessions, the industry lunch and children's dinner. Friday
will include an author breakfast, the annual meeting, morning
educational sessions and the trade show, which starts at 11 a.m. Saturday will be devoted to an
author breakfast and the trade show.
In a letter to members, NEIBA executive director Steve Fischer noted
that the change in days, based in part on surveys of last year's show
attendees, will "accomplish two important goals: First, it will
concentrate educational programming in the first day and a half.
Second, it means much less educational time running simultaneously and
competing with show exhibition hours."
Under the traditional schedule, the trade show was held the second and third day of the event. Now the show floor opens later in the morning on Friday, the second day. Fischer emphasized that exhibitors will be able to set up on Thursday afternoon and will have access to the trade show floor as early as 6 a.m. on Friday.
"We heard from booksellers and exhibitors about the overlap," Fischer told Shelf Awareness. "It sometimes seems like a good idea to have the floor open and hold educational sessions simultaneously, but from a practical point of view, they took away from each." He predicted that many attendees would be happy, too, not to have the show take place on Sunday.
Fischer added that the moveable feast is being replaced by a Friday author reception modeled on the one held at the two ABA Winter Institutes, where booksellers go from table to table and visit with authors and publishers.
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On April 4, Barnes & Noble opens a new store in the Francis Scott Key Mall at 5500 Buckeystown Pike, Frederick, Md.
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Mary McCarthy, who resigned last week as v-p and COO of the
Harry W. Schwartz Bookshops, Milwaukee, Wis., may be reached at
marymccarthy1230@yahoo.com.
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Congratulations to Gene Ambaum of Unshelved, named by Library Journal as one of its 2007 Movers & Shakers.
Besides his great artwork, Gene is, as a colleague put it, "an
outstanding teen librarian, beloved by patrons and coworkers, who
brings a freshness to everything we do."
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Effective early next month, Sue Miller is joining
Chelsea Green Publishing Co. as New England and Mid-Atlantic sales
manager. She replaces Allison Lennox, who is joining the company’s
marketing department to book and publicize author events and tours.
Miller spent five years at Prentice Hall as a higher education sales
rep and during 13 years with Random House was a national accounts
manager, regional sales manager and field rep. Most recently, she
volunteered in Sri Lanka to help in tsunami relief, working for
International Humanitarian Assistance and Habitat for Humanity. She won
the 2005 Humanitarian/Patron Award for her service by the Sri Jinananda
Children's Home.
In a statement, Chelsea Green publisher Margo Baldwin said that
Miller's "sterling reputation, plus her experience in the trade and
abroad, make her the ideal fit to support our key customers in the
Eastern United States."
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