Truth Sometimes Is Fiction

News reports out of Poland (not often I get to say that) are noting the sentencing of one Krystian Bala in the murder of Dariusz Janiszewski. Apparently young Krys thought Dariusz was having an affair with his wife but was never considered a suspect in the murder that went unsolved. Unsolved that is until young Krys got the writer's bug and felt compelled to write about it. (Now who does that remind you of?) Long story short, a diligent police officer read said published book and after a quick investigation arrested Krys for Murder. The court agreed there was no If about it and that he indeed did it.

BBC

Borders Earnings Call

Following on from last weeks earnings annoucement, Seeking Alpha posted the transcript of the earnings call held on the same day. Some highlights:

George Jones on execution at the store level:

Our progress on execution has been reached through a combination of efforts including an ongoing focus on improvement in retailing basics such as effective use of key items, impulse items, feature tables, end caps and so on -- you've heard me talk about this before and it's really showing it's working -- merchandise presentation, effectiveness of marketing and promotions, and consistency of execution. We've also made significant process in changing the culture of our stores organization in that they are dramatically increasing their focus on driving sales within their individual stores

Jones on the improvement in comp store sales:

We're particularly encouraged by the improvement in comparable store sales cross all business segments. Of course, record sales of Harry Potter and the Deathly Hallows led these results, but even without sales of Harry Potter -- this is important -- we improved our comp store sales in each operating segment. This is an important shift in the trend for us.

Jones on the impact of Borders Rewards in driving traffic to stores:

our unique mix of promotional offers and compelling content delivered via email to these over 20 million Borders Rewards members is really helping drive traffic to our stores. In fact, our transaction count at domestic Borders stores increased by .5% in Q2 and notably improved in ten of the 13 weeks of the period; the three that didn't were the first three weeks of the quarter so we had ten in a row where it mproved. Of course, Harry Potter was a big part of driving that traffic but only during the final two weeks and one day of the quarter.

Jones on the improvement at the Walden stores:

frankly, had been sort of treated like a stepchild for a while. In addition, we focused merchant team on the unique aspects of the mall business. Breaking this business out and focusing on its opportunities has greatly improved this operations and helped drive positive results.

Wilhelm on the sale of the international operations:

This process is moving forward as planned in both the U.K. and Australia-New
Zealand, yet it is more advanced for Borders U.K. as we started there a bit earlier.

Without identifying the specific issues, Wilhelm noted that they are "we're spending the necessary money to fix the merchandising systems." The merch system has been problematic for Borders over the past two years. He later noted that continued higher SG&A costs would be attributable in part to continued spending to fix the merchandising systems.

Jones in response to a question about supply chain efficiencies:

...it wasn't as much of bad decisions that Borders made in terms of things they did wrong as it was things that we didn't do that perhaps our competitors did do more effectively. Distribution and supply chain and systems and things like that are good examples of these.

...in terms of managing our inventory from the whole supply chain factor, part of the distribution centers, and as Ed said, I think they've made investments and we've done good things on those. The other part of it comes back to the systems which is I've certainly talked a lot about. We clearly still have deficiencies there on that. We don't have, if you look at versus what a normal retailer I would expect would have in terms of automated replenishment or what our competitors have, we've got a ways to go there.We still believe we have big, big opportunities in terms of managing our inventory levels more effectively with this type of efforts as well as systems. We have the distribution centers now in place and we expect as we get the systems in place we'll start catching up to where we really should be on our inventory turns.

Wilhelm: Well, improving turns from 1.6 which we've been at historically to 2 generates about $200 million of cash for us. So that's the proxy of what would come out of inventories.

Jones: Longer-term if we were able to get it, say, to 2.6 which is where our major competitor is now, it'd be $500 million

The Times E-Reader

My approximately $9 per week that I used to spend for the New York Times is down to $3.50 as I have migrated the majority of my reading to the web site. On Sundays, the Times remains a fundamental part of the day but I wonder how long I am going to continue to buy the paper version when my perception grows that the news is out of date and the content is less substantial. Perhaps it is a function of the summer but the newspaper appears thinner when I pick it up on Sunday's, and I don't immediately believe it has the heft to keep my attention for more than 2 hours.

The insert promoting the Times Reader caught my eye this month and I decided to give the free trial a try. There is a lot of speculation about The Times' intentions regarding Times Select which requires a payment to see added content on the NYTimes website. They do have (to me) a surprising number of subscribers to this content but in the face of expected heated competition from NewsCorp/Dow Jones there is speculation that they will shut down Times Select. In my view they should consider doing the same with the E-Reader.

On a positive note, the Reader is great if you want a version on your laptop and you can't by a paper at the airport or train station. During the month I had free access I used it several times on the train and it was excellent but it wasn't better than the paper version. I found the navigation less than intuitive and I repeatedly found myself in a story I had no interest in because I couldn't tell from the headline what the story was about. In contrast on NYTimes.com and in the paper you can glance at the slug and immediately get a sense of the subject. That same functionality seemed to be lacking on the Reader.

In my experience there seemed to be less opportunity for engagement with the Reader than with the paper version. I am not sure why I felt this - perhaps it is a tactile thing - but I found myself preferring to buy the paper. I found it frustrating that I couldn't permalink to articles as can be done on the (NYT) web site and attempting to jump to the article on the NYTimes.com is not possible. Obviously, the reader is designed for use when you are not on-line but this was still frustrating. When I was online, my attempt to check the NY weather was laughably complex.

As wi/fi becomes more prevalent the e-reader is going to look increasingly like a relic. There is so much more content on the NYT web site but little of this audio and video content is available via the reader. If they want this product to succeed they will need to do far more with the product. Instead of trying to develop a rendition of the print, they should be thinking of developing a consumer news "platform" that equates to a LexisNexis type news product for consumers. It would be interesting if the New York Times built this platform approach in conjunction with Yahoo.com (or Microsoft) such that NYT brands the Yahoo news service with NYTimes. In this model NYTimes would continue to leverage their news gathering and analysis strength but could also regain some of the classified, listings and ad revenue that has disappeared in print.

Since I wrote the post last week, Google announced that they are to 'publish' the full feeds from the Associated Press, the Press Association and others. This is a huge and perhaps seismic issue for news sites such as NY Times who rely on traffic from Google to boost exposure to their content. In the case of NYTimes they have much more direct traffic than most news sites but the battle is joined and I see a need for the Times to do something far more fundamental with MyTimes, The Times Reader or NYTimes.com in order to maintain readership and not become some has been news service.


(On two related notes, it was curious to me that as part of the free trial to the Times Reader that the Times Select content wasn't included - I find this odd. Secondly, I have not been contacted at all to actually pay for a subscription for the Reader. Isn't conversion to a paying subscription the purpose of the free trial? Very lazy approach I think).

Endorsement for PersonaNonData

It is always gratifying to receive an endorsement but in this particular case the effort is highly creative. Ann Michael lists a number of useful and interesting blogs she considers great sources of information about publishing and media. I agree.

Thanks!

UK Borders Sale

The Bookseller is reporting that Pizza Express founder Luke Johnson is backing a management buy-out of Borders led by CEO David Roche. They further suggest the chain may go for as little as £25mm with little competition from WH Smith to push the price up. Smiths are looking for a fire sale deal and would likely shut numerous stores and concentrate only on the most profitable locations.

Ebsco Acquire 10 Sage Databases

EBSCO Publishing one of the world's premier database aggregators, has acquired ten renowned indexes from SAGE. The deal will bring the leading print indexes in their fields to users electronically through the EBSCOhost® platform, one of the most-used interfaces available for scholarly research.

The following indexes are now owned by EBSCO and will be available electronically via EBSCOhost:

• Abstracts in Social Gerontology™
• Educational Administration Abstracts™
• Human Resources Abstracts™
• Peace Research Abstracts Journal™ (Now called Peace Research Abstracts™)
• Sage Family Studies Abstracts™ (Now called Family Studies Abstracts™)
• Sage Public Administration Abstracts™ (Now called Public Administration Abstracts™)
• Sage Race Relations Abstracts™ (Now called Race Relations Abstracts™)
• Sage Urban Studies Abstracts™ (Now called Urban Studies Abstracts™)
• The Shock & Vibration Digest™
• Violence & Abuse Abstracts™

These are highly-refined, specialized collections in their subject areas. Currently, each index is available in print-only. Online versions, including backfiles and other benefits, such as unlimited use, remote accessibility, multi-database searching, links to full-text, etc. are expected to be available by October 2007.

EBSCO offers a suite of more than 200 full-text and secondary research databases. Through a library of tens of thousands of full-text journals, magazines, books, monographs, reports and various other publication types from renowned publishers, EBSCO serves the content needs of all researchers.

Press Release

Informa Post Strong Results

The Telegraph reports that Informa has raised its half year dividend by 70% as the company consolidates its purchase of Datamonitor. The company said underlying profits rose 24% and revenues grew 10% adjusted for currency movements. In their press release the company said their efforts to establish a stable revenue platform that wasn't subject to economic variables is succeeding with more than 3/4 of their revenues 'visible and renewing' from subscriptions and book sales.

Earlier in the year, analysts suggested that the company had over paid for Datamonitor however management were convinced that price was right and that better management of the company would improve results. Informa noted that Datamonitor revenues were up 62% (with organic growth up 22%) and operating income up 51%. Furthermore, growth on the top line and bottom line is expected to improve further as product sales are integrated further and final cost cutting programs are put in place.