cbs.marketwatch.com
An interesting article on what may be Borders overall attitude to its web presence. I've never been too enthusiastic about Borders' investing much in developing their web presence, and it's nice to see that the company may have the same attitude.
If you can't beat 'em, why bother? For book sellers, cyberspace isn't the only way to make money (oops...lose money). In fact there is money to be made selling books in the real world, and Borders (BGP: news, msgs) is doing just that. At the Money.com Web site, David Futrelle says Borders appears to have decided not to even bother trying to horn in on Amazon's (AMZN: news, msgs) online business. Instead it's concentrating on bricks and mortar, and concentrating on trying to write a better chapter for its stock.
Borders thinks its own stock is undervalued in the market and recently announced plans to explore options, from recapitalization to a leveraged buyout in an effort to increase shareholder value. As for its online presence, it pales in comparison to the efforts being mounted by Amazon rival Barnes and Noble (BNBN: news, msgs). Says Futrelle, why waste money fruitlessly chasing the market leader in the online world when there are much better opportunities in the real world? Online book sales totaled just $1.6 billion last year; that's only a little more than half of Borders' revenue alone. So instead of colonizing cyberspace, Borders is busily colonizing Great Britain, Australia and Singapore.
There are still lots of people buying books in stores, and Borders appears to be attracting a lot of them. Sales at Borders domestic superstores increased 20 percent last year and earnings per share rose 44 percent. But Futrelle says investors these days seem far more interested in bargain books than bargain stocks. And the hired hands from Merrill Lynch (brought on to help explore strategic alternatives for Borders) have their work cut out for them. |
