May 6, 2011

Borders CEO lashes out at publishers and the company's hometown for its problems

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Borders CEO Mike Edwards gave an interview to the company’s hometown newspaper yesterday, the Ann Arbor News, in which he reveals that the company that has yet to present a reorganization plan to the court has a new scheme for pulling out of bankruptcy: attacking publishers.

Edwards essentially tells reporter Nathan Bomey that Borders is in the position it’s in because the publishers it owes tens of millions of dollars to won’t assume even greater debt — i.e., won’t go back to previous terms and start shipping them books without cash upfront. This, despite the fact that the company’s own ownership famously refused to put more money into it themselves.

Publishers’ response to Borders’ predicament has been “disappointing,” says Edwards (in response to a whoppingly one-sided — or perhaps just blazingly ignorant — question, “Are you suprised the publishers haven’t been as cooperative as you would have hoped?”). “If all the pieces have to come together, the terms commitment then drives the financial sponsorship. If so, then we have a business model that we can create a plan of reorganization around, get approval from the courts and emerge.”In other words, because the publishers won’t do what we want them to, no one will help, so none of this is Borders’ fault.

Indeed, Bomey says Edwards claimed “the company would’ve closed 110 stores, instead of nearly 230, if publishers had agreed to concessions in January.”

But not to worry. Edwards says he’s about to present publishers with a new plan that is a “shared risk scenario” — as if Borders had anything further to risk, and publishers are being unfair if they don’t risk the loss of even more money — that is, by the way, a “‘Hail Mary’ pass.”

How enticing.

Of course, it’s not just the publishers screwing Borders. The town where it was established and headquarter for decades, and has announced it is leaving after laying off hundreds of staffers, hasn’t been any help either. “I wouldn’t say there’s been huge outreach from the community to save Borders here,” says Edwards. “I’ve done business in a lot of cities and I have not experienced this, which is a less than positive approach with a company that’s in trouble.”

Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House.

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