Borders Group, Inc. (OTCBB: BGPIQ) is an international book and music retailer based in Ann Arbor, Michigan. The company employs approximately 19,500 throughout the U.S., primarily in its Borders and Waldenbooks stores. Online shopping is offered through borders.com.
As of January 30, 2010, the company operated 511 Borders superstores in the United States, including 508 in the U.S. and three in Puerto Rico, as well as 15 Borders stores in Australia. The company also operated 175 stores in the Waldenbooks Specialty Retail segment, including Waldenbooks, Borders Express, Borders airport stores, and Borders Outlet stores.
On February 16, 2011, the company announced that it had filed for Chapter 11 bankruptcy protection, listing $1.275 billion in assets and $1.293 billion in debts in its filing.[1] The company also announced the liquidation and closing of 226 stores.
Borders Group, Inc. (Borders) is an operator of book, music and movie superstores and mall-based bookstores. As of January 30, 2010, Borders operated 511 superstores under the Borders name, including 508 in the United States and three in Puerto Rico. It also operated 175 mall-based and other small format bookstores, including stores operated under the Waldenbooks, Borders Express and Borders Outlet names, as well as 29 Borders-branded airport stores. It has three segments: Borders Superstores, Waldenbooks Specialty Retail stores and International stores. In July 2010, the Company sold Paperchase Products Limited to Primary Capital Limited. In February 2011, the Company filed for bankruptcy protection.
Borders Superstores
Borders superstores offer customers an assortment of books, music and movies, gifts and stationery, customer service and browsing. Borders superstores average 24,800 square feet in size and on average, carry 82,000 book titles, with individual store selections ranging from 53,000 titles to 141,000 titles, across various categories, including many titles.
Waldenbooks Specialty Retail Stores
Waldenbooks Specialty Retail operates small format stores in malls, airports and outlet malls, offering customers a source for new releases, hardcover and paperback bestsellers, periodicals and a standard selection of other titles. Waldenbooks Specialty Retail operates stores under the Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores and the mall-based seasonal businesses. Waldenbooks Specialty Retail stores average approximately 1,300 square feet in size, and carry an average of 13,500 titles, ranging from 5,500 in airport stores to 19,000 in format stores.
International Stores
International stores include three Borders superstores in Puerto Rico and the Paperchase United Kingdom business. Paperchase is a stationery retailing in the United Kingdom. As of January 30, 2010, the Company operated 85 Paperchase locations, including 51 stand-alone stores, 27 concessions in the stores of other retailers, and seven stores located in railway stations. The Paperchase’s merchandise is developed specifically by and for Paperchase.
By 1992, Borders had quadrupled its size and was beginning the complicated process of going public. Around the same time, the retailer attracted the attention of the huge Kmart Corporation, which had bought Waldenbooks in 1984 and was looking to expand its book retailing segment even further. In October of 1992, Louis and Tom Borders sold their business (though they remained investors), and Borders became a wholly owned subsidiary of Kmart. Sales from Borders' operations for 1993 reached $224.8 million, a 15.8 percent increase in net sales over the previous year. Several changes were implemented in 1993, including modernized cash registers, a human resources department, formal training programs for employees, and the introduction of music to the stores' stock.
In August 1994, Borders and sibling Waldenbooks formed a new company called Borders Group, Inc., with plans to eventually break free from Kmart. DiRomualdo joined with George Mrkonic, who ran Kmart's specialty stores division for four years (which included Builders Square, The Sports Authority, Pay Less Drug Stores, Waldenbooks, Borders, Kmart's in-store Reader's Market shops and others) and had jumped over to the Group in November. He had helped shape the company into a mechanized book and music mecca. By the end of the year Borders had acquired five CD Superstores and one Planet Music outlet. The company went on to add four Planet stores and 32 new Borders superstores.
The Group's overall sales for the year reached $1.5 billion. With what some analysts have called the industry's most sophisticated computer inventory management and sales system, Borders not only possessed the highest sales-per-foot ratio in the industry, but was able to track popular titles by selling season. Borders had identified as many as 55 separately defined seasonal patterns and programmed these into the computer system to keep better track of seasonal and regular bestselling titles, and to help maintain a supply of such titles with little or no interruption in prospective sales.
Though Kmart's ownership of Borders (and Waldenbooks) was to end with the formation of the Borders Group, Inc., finances were settled with the proceeds of a public offering of the new company's stock in May 1995. Two months later, Borders announced it would purchase Kmart's 13 percent stock share. DiRomualdo was installed as chairman and chief executive, while Mrkonic became vice-chairman and president. After a one-time write-off of $182 million, the Borders Group announced second quarter (1994) sales of nearly $364 million, representing an 11.7 percent gain over the previous year's posted sales of $327 million.
Though Borders' transition from small retailer to national chain wasn't completely smooth, many long-time employees remained with the company and were rewarded for their loyalty by generous benefits worked out during the Kmart acquisition. One sore point arose in 1994 with the proposed closure of Louis and Tom's original Borders store in Ann Arbor, set for relocation into an old department store building. Not only was the new store slated to be a Borders Books & Music (the previous was books-only), but its spacious 45,000-square foot interior (four times the size of the original) could in no way maintain the homey atmosphere of the first Borders book shop, despite the added benefits of much more space and extras like the popular new espresso bars.
Nevertheless, Borders new format was obviously giving customers what they wanted and needed. In addition to its unique, state-of-the-art inventory and ordering system, Borders' employee base was another of its major boons; most employees were full-time and college-educated, and all were tested for their knowledge of literature and music prior to hiring. Additionally, the bookstore chain prided itself on first-rate customer service, offering patrons a wide range of services from locating out-of-print titles to community activities like children's storytelling hours and poetry readings.
Rounding out Borders' offerings were growing varieties of alternative educational and informational media, from videos to CD-ROMs, a relaxing and comfortable environment which encouraged customers to linger, and the ubiquitous espresso bars. An industry-first that was quickly copied by competitors, Borders' espresso bars grew from a store add-on and overhead cost to a $20 million per year venture. 82 of the company's 88 superstores had espresso bars in 1995, and all new stores were scheduled to have them.
The Borders superstore prototype in 1996 was 30,000 square feet of space, substantially larger than major competitor Barnes & Noble's megastore. Averaging 128,000 book titles and about 57,000 prerecorded music titles at an initial cost of $2.6 million, most Borders superstores became profitable within 12 months of business. Since the majority of Borders' superstores were built following the early 1990s, the company's success by 1996 had been swift and immediate.
Revenue figures for year-end 1995 were just shy of $1.6 billion for the Borders Group as a whole, with Borders Books & Music stores contributing over $622.6 million (a 63.4 percent increase over 1994's sales). The superstores contributed a healthy 39.6 percent slice of the Group's overall sales, a welcome and expected 12.2 percent increase from their share in 1994. Analysts predicted 1996 sales to reach more than $2 billion, with Borders' superstores division hitting $950 million.
Second only to Barnes & Noble in sales, Borders' superstores were chosen over Barnes' by analysts as having a better variety of products, and most expected the bookseller to overtake its rival in the near future. Additionally, Borders planned to take advantage of Waldenbooks' status as a cash cow to finance expansion across the nation. Scheduled to open between 30 and 35 new Borders superstores in 1996 and to continue the trend (from 35 to 40 new superstores per year) until the end of the 1990s, Borders hoped to not only prove its mettle but to become the country's top book-retailing chain.
Principal Subsidiaries: Borders Inc.; Waldenbooks; Planet Music, Inc.
OVERALL
Beta: 2.08
Market Cap (Mil.): $17.09
Shares Outstanding (Mil.): 72.07
Annual Dividend: --
Yield (%): --
FINANCIALS
BGPIQ.PK Industry Sector
P/E (TTM): -- 4.98 13.52
EPS (TTM): 9.51 -- --
ROI: -31.91 5.20 1.28
ROE: -448.97 6.27 2.12
Statistics:
Public Company
Incorporated: 1971 as Borders Books
Employees: 10,000
Sales: $1.74 billion (1995)
Stock Exchanges: New York
SICs: 5735 Recorded & Prerecorded Tape Stores; 5942 Book Stores
Address:
500 E. Washington Street
Ann Arbor, Michigan 48104
U.S.A.
As of January 30, 2010, the company operated 511 Borders superstores in the United States, including 508 in the U.S. and three in Puerto Rico, as well as 15 Borders stores in Australia. The company also operated 175 stores in the Waldenbooks Specialty Retail segment, including Waldenbooks, Borders Express, Borders airport stores, and Borders Outlet stores.
On February 16, 2011, the company announced that it had filed for Chapter 11 bankruptcy protection, listing $1.275 billion in assets and $1.293 billion in debts in its filing.[1] The company also announced the liquidation and closing of 226 stores.
Borders Group, Inc. (Borders) is an operator of book, music and movie superstores and mall-based bookstores. As of January 30, 2010, Borders operated 511 superstores under the Borders name, including 508 in the United States and three in Puerto Rico. It also operated 175 mall-based and other small format bookstores, including stores operated under the Waldenbooks, Borders Express and Borders Outlet names, as well as 29 Borders-branded airport stores. It has three segments: Borders Superstores, Waldenbooks Specialty Retail stores and International stores. In July 2010, the Company sold Paperchase Products Limited to Primary Capital Limited. In February 2011, the Company filed for bankruptcy protection.
Borders Superstores
Borders superstores offer customers an assortment of books, music and movies, gifts and stationery, customer service and browsing. Borders superstores average 24,800 square feet in size and on average, carry 82,000 book titles, with individual store selections ranging from 53,000 titles to 141,000 titles, across various categories, including many titles.
Waldenbooks Specialty Retail Stores
Waldenbooks Specialty Retail operates small format stores in malls, airports and outlet malls, offering customers a source for new releases, hardcover and paperback bestsellers, periodicals and a standard selection of other titles. Waldenbooks Specialty Retail operates stores under the Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores and the mall-based seasonal businesses. Waldenbooks Specialty Retail stores average approximately 1,300 square feet in size, and carry an average of 13,500 titles, ranging from 5,500 in airport stores to 19,000 in format stores.
International Stores
International stores include three Borders superstores in Puerto Rico and the Paperchase United Kingdom business. Paperchase is a stationery retailing in the United Kingdom. As of January 30, 2010, the Company operated 85 Paperchase locations, including 51 stand-alone stores, 27 concessions in the stores of other retailers, and seven stores located in railway stations. The Paperchase’s merchandise is developed specifically by and for Paperchase.
By 1992, Borders had quadrupled its size and was beginning the complicated process of going public. Around the same time, the retailer attracted the attention of the huge Kmart Corporation, which had bought Waldenbooks in 1984 and was looking to expand its book retailing segment even further. In October of 1992, Louis and Tom Borders sold their business (though they remained investors), and Borders became a wholly owned subsidiary of Kmart. Sales from Borders' operations for 1993 reached $224.8 million, a 15.8 percent increase in net sales over the previous year. Several changes were implemented in 1993, including modernized cash registers, a human resources department, formal training programs for employees, and the introduction of music to the stores' stock.
In August 1994, Borders and sibling Waldenbooks formed a new company called Borders Group, Inc., with plans to eventually break free from Kmart. DiRomualdo joined with George Mrkonic, who ran Kmart's specialty stores division for four years (which included Builders Square, The Sports Authority, Pay Less Drug Stores, Waldenbooks, Borders, Kmart's in-store Reader's Market shops and others) and had jumped over to the Group in November. He had helped shape the company into a mechanized book and music mecca. By the end of the year Borders had acquired five CD Superstores and one Planet Music outlet. The company went on to add four Planet stores and 32 new Borders superstores.
The Group's overall sales for the year reached $1.5 billion. With what some analysts have called the industry's most sophisticated computer inventory management and sales system, Borders not only possessed the highest sales-per-foot ratio in the industry, but was able to track popular titles by selling season. Borders had identified as many as 55 separately defined seasonal patterns and programmed these into the computer system to keep better track of seasonal and regular bestselling titles, and to help maintain a supply of such titles with little or no interruption in prospective sales.
Though Kmart's ownership of Borders (and Waldenbooks) was to end with the formation of the Borders Group, Inc., finances were settled with the proceeds of a public offering of the new company's stock in May 1995. Two months later, Borders announced it would purchase Kmart's 13 percent stock share. DiRomualdo was installed as chairman and chief executive, while Mrkonic became vice-chairman and president. After a one-time write-off of $182 million, the Borders Group announced second quarter (1994) sales of nearly $364 million, representing an 11.7 percent gain over the previous year's posted sales of $327 million.
Though Borders' transition from small retailer to national chain wasn't completely smooth, many long-time employees remained with the company and were rewarded for their loyalty by generous benefits worked out during the Kmart acquisition. One sore point arose in 1994 with the proposed closure of Louis and Tom's original Borders store in Ann Arbor, set for relocation into an old department store building. Not only was the new store slated to be a Borders Books & Music (the previous was books-only), but its spacious 45,000-square foot interior (four times the size of the original) could in no way maintain the homey atmosphere of the first Borders book shop, despite the added benefits of much more space and extras like the popular new espresso bars.
Nevertheless, Borders new format was obviously giving customers what they wanted and needed. In addition to its unique, state-of-the-art inventory and ordering system, Borders' employee base was another of its major boons; most employees were full-time and college-educated, and all were tested for their knowledge of literature and music prior to hiring. Additionally, the bookstore chain prided itself on first-rate customer service, offering patrons a wide range of services from locating out-of-print titles to community activities like children's storytelling hours and poetry readings.
Rounding out Borders' offerings were growing varieties of alternative educational and informational media, from videos to CD-ROMs, a relaxing and comfortable environment which encouraged customers to linger, and the ubiquitous espresso bars. An industry-first that was quickly copied by competitors, Borders' espresso bars grew from a store add-on and overhead cost to a $20 million per year venture. 82 of the company's 88 superstores had espresso bars in 1995, and all new stores were scheduled to have them.
The Borders superstore prototype in 1996 was 30,000 square feet of space, substantially larger than major competitor Barnes & Noble's megastore. Averaging 128,000 book titles and about 57,000 prerecorded music titles at an initial cost of $2.6 million, most Borders superstores became profitable within 12 months of business. Since the majority of Borders' superstores were built following the early 1990s, the company's success by 1996 had been swift and immediate.
Revenue figures for year-end 1995 were just shy of $1.6 billion for the Borders Group as a whole, with Borders Books & Music stores contributing over $622.6 million (a 63.4 percent increase over 1994's sales). The superstores contributed a healthy 39.6 percent slice of the Group's overall sales, a welcome and expected 12.2 percent increase from their share in 1994. Analysts predicted 1996 sales to reach more than $2 billion, with Borders' superstores division hitting $950 million.
Second only to Barnes & Noble in sales, Borders' superstores were chosen over Barnes' by analysts as having a better variety of products, and most expected the bookseller to overtake its rival in the near future. Additionally, Borders planned to take advantage of Waldenbooks' status as a cash cow to finance expansion across the nation. Scheduled to open between 30 and 35 new Borders superstores in 1996 and to continue the trend (from 35 to 40 new superstores per year) until the end of the 1990s, Borders hoped to not only prove its mettle but to become the country's top book-retailing chain.
Principal Subsidiaries: Borders Inc.; Waldenbooks; Planet Music, Inc.
OVERALL
Beta: 2.08
Market Cap (Mil.): $17.09
Shares Outstanding (Mil.): 72.07
Annual Dividend: --
Yield (%): --
FINANCIALS
BGPIQ.PK Industry Sector
P/E (TTM): -- 4.98 13.52
EPS (TTM): 9.51 -- --
ROI: -31.91 5.20 1.28
ROE: -448.97 6.27 2.12
Statistics:
Public Company
Incorporated: 1971 as Borders Books
Employees: 10,000
Sales: $1.74 billion (1995)
Stock Exchanges: New York
SICs: 5735 Recorded & Prerecorded Tape Stores; 5942 Book Stores
Address:
500 E. Washington Street
Ann Arbor, Michigan 48104
U.S.A.