Borders Group CEO Ron Marshall is resigning effective today. Borders hired him a little over a year ago, on January 5 2009, in order to turn the bookstore around. The Wall Street Journal covers the story:
The move comes a week after Borders posted a steep drop in revenue and same-store sales for the vital holiday period.
Mr. Marshall, 55 years old, took over as CEO at Borders on Jan. 5, 2009. A turnaround specialist with a strong financial background, Mr. Marshall is credited with reducing debt at Borders, cutting expenses and gaining the confidence of the publishing community in the struggling retail chain. However, Borders had a very weak Christmas period and must now prove that it can boost revenue.
Under Mr. Marshall and Mark Bierley, the retailer’s chief financial officer, Borders has sharply reduced its corporate overhead and also expanded into the e-book retail business by taking a stake in Kobo Inc., an e-book retailer that Canadian retailer Indigo Books & Music Inc. spun off as a standalone entity late last year. Borders is expected to integrate Kobo’s e-bookstore into Borders.com this year.
But the chain, which competes head-to-head with Amazon.com Inc., Barnes & Noble Inc., and major discounters that sell a limited selection of books at cheap prices, has so far failed to prove that it can generate sales gains. Revenue at Borders’ superstores for the 11-week holiday period ended Jan. 16 dropped 15% to $649.2 million while same-store sales, a key economic indicator, also fell 15%. Borders is expected to report results for its fiscal fourth quarter, which ends Jan. 30, in late March.
Sounds like Ron Marshall barely had a chance to prove himself. Borders is a company in a flailing industry (brick & mortar bookstores). Firing Marshall is a sign of how desperate they’ve become for a rapid-fire turnaround. Unless their next CEO is perfect for a rapid-fire reconstruction, I pity that person.