Borders Group Inc. Company Profile
Strategic and Operational Planning
May 31, 2011
By: Ayesha Mujtaba
The # 2 bookstore operator in the US (after Barnes & Noble), Borders Group runs about 400 Borders superstores in about 45 states and Puerto Rico, as well as roughly 175 small-format shops under the Waldenbooks, Borders Express, and Borders Outlet banners. Borders superstores offer up to 170,000 book, music, and movie titles, and most feature Seattle's Best Coffee shops (thanks to a licensing agreement with owner Starbucks). The company also peddles products via its website. Faced with declining sales and mounting debts, Borders filed for Chapter 11 ...view middle of the document...
S., smaller-format Borders Express and Waldenbooks stores, Borders Airport Stores, Borders Outlets, a variety of seasonal businesses, and the domestic distribution centers, with its international presence.
On February 16, 2011, Borders Group, Inc., Borders, Inc. and certain of it’s subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief under Chapter 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors continue to operate their business as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of Chapter 11 and orders of the Bankruptcy Court. Borders international franchised operations are not included in the Chapter 11 Cases.
The Chapter 11 Cases were filed in response to an environment of curtailed customer spending, increasing industry competition and an anticipated lack of sufficient liquidity, including trade credit provided by the vendors, to permit Borders to pursue it’s business strategy to position the Borders brand successfully for the long term. As part of the Chapter 11 Cases and as discussed further below, the goal is to develop and implement a Chapter 11 plan that meets the standards for confirmation under the Bankruptcy Code.
Fiscal Year Ends: Jan 29
Most Recent Quarter (mrq): Jan 29, 2011
Profit Margin (ttm): -13.14%
Operating Margin (ttm): -8.64%
Return on Assets (ttm): -10.32%
Return on Equity (ttm): -13,056.52%
Revenue (ttm): 2.27B
Revenue Per Share (ttm): 33.27
Qtrly Revenue Growth (yoy): -17.60%
Gross Profit (ttm): 374.00M
EBITDA (ttm): -118.70M
Net Income Avl to Common (ttm): -300.30M
Diluted EPS (ttm): -4.37
Qtrly Earnings Growth (yoy): N/A
Total Cash (mrq): 24.70M
Total Cash Per Share (mrq): 0.34
Total Debt (mrq): 217.90M
Total Debt/Equity (mrq): N/A
Current Ratio (mrq): 0.86
Book Value Per Share (mrq): -2.13
Cash Flow Statement
Operating Cash Flow (ttm): 56.10M
Levered Free Cash Flow (ttm): 161.81M
Operational State of the Organization
In light of the ongoing impact of the difficult economy of the past few years, and the rapidly changing retailing environment for books and related products, it is essential that Borders restructure itself to reposition its business to be viable and successful over the long term. To that end, Borders has determined the best route to undertake the necessary reorganization of its business is through the filing of a petition for reorganizational relief under Chapter 11 of the Bankruptcy Code.
During this reorganization period:
• Borders stores are open for business. It will continue to provide customers with a vast assortment of books in a warm and relaxing environment – and intends to build on this. Stores will...