Bad Times at Borders

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Board members won’t comment, but presumably they appreciated Jones’s turnaround abilities and his depth and variety of retail experience. As for Jones, “I joined Borders Group in July 2006 because I believe in its brand and its people,” he wrote in his first letter to shareholders in early 2007, taking particular note of the company’s “strong and enviable bond with millions of customers.” But, Jones added, the company had not kept up with “the rapid changes in how consumers access information and entertainment.” And indirectly he faulted some of Josefowicz’s moves, saying that the remodeling program and Borders Rewards had “failed to boost store traffic and transactions sufficiently.”

After visiting a number of stores around the country and bringing in two trusted colleagues to assist him, Jones set about reinventing Borders. His strategic plan, announced in March 2007, seeks to make the company “a headquarters for knowledge and entertainment.”

As Jones and other Borders executives tell it, the future of Borders is on display at the store that opened south of town in February. The entrance and checkout counters are framed by the company’s fastest-growing units, a Seattle’s Best Coffee cafe and a Paperchase stationery department. “Lifestyle” sections specializing in travel, cooking, and children’s books have been expanded, and though there are fewer other books, more are displayed face out, the better to catch the eye. At a “Digital Center,” customers can download songs to an MP3 player, burn a CD, or turn their photos into a coffee-table book.