Management at Borders is also an issue and has been over the past ten years or so. New management is installed and the announcement of the web site is a representation of the new regimes strategic plan for the next several years. There have been several regimes installed in recent years with grand plans (category management anyone?) but while the ideas had merit the execution left something to be desired. Building a new web presence is not something that they can do on the cheap which means they are going to have to have the right people in place to get the job done. If it were me, I would take the entire web initiative out of Ann Arbor and set it up from scratch in India. There is just too much baggage in the home office.
Elements of the announced strategic plan are as follows from the press release:
Revitalizing the domestic Borders superstore business to achieve, by 2009:
- Consolidated EBIT margins of 5% to 6% compared to 1.8% in 2006, driven by sustained same-store sales growth in the low- to mid-single digits at domestic superstores.
- Improved inventory turns of 2 times compared to 1.6 times in 2006.
- Refocusing investments toward transforming domestic superstores while significantly reducing investment in segments that have not provided a satisfactory return, including the International segment and Waldenbooks
Specialty Retail segment.
- The company will explore strategic alternatives for the majority of its International segment, including its U.K., Ireland, Australia and New Zealand superstores and Books etc. business, and will look toward its successful franchise model for future international expansion in new markets.
- Highly aggressive efforts, which began in the fourth quarter of 2006, to right-size the Waldenbooks Specialty Retail segment will continue in 2007 with the goal of reducing the number of Waldenbooks stores from 564 at the close of 2006 to approximately 300 by the end of 2008.
- Reinventing the company by leveraging innovation, technology and strategic alliances to differentiate Borders in the marketplace, including the debut of a new proprietary e-commerce site in early 2008
In discussing the web site the company says the following:
As part of the development of Borders.com, the company is consolidating its Web properties into a single infrastructure. This will facilitate a seamless cross-channel experience that will integrate the in-store and on line experiences. The addition of new "Digital Centers" in Borders stores will enable customers to learn about, interact with, and purchase new digital products-- such as audio books, e-books, MP3 players -- and services such as down loading and personal publishing that complement the Borders brand. The company is in the process of exploring several potential arrangements for key partnerships with respect to its digital offerings. The digital services can be made available both in-store and online as a result of the Web initiative.
Lastly in signing off the CEO George Jones is quoted as follows:
"We need to reinvent our business to exploit the rapid changes taking place in how consumers access information and entertainment," Jones said."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."
Gosh, that about sums it up. Good luck with that.