Borders CEO Tells Customers “All Is Well”

By Douglas A. McIntyre Updated Feb 17, 9:21AM EST · Published Feb 17, 6:08AM EST

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Mike Edwards, the CEO of Borders Group which has just declared bankruptcy, wrote the retailer’s “Rewards Members” to tell them everything at the company is fine. If the Borders’ program works as most loyalty marketing does, members are among the firm’s most frequent customers.

Edwards said in his letter that Borders would remain a “best in class” retailer online and in stores. The company has clearly failed at both, based on financial results. A Chapter 11 filing will not make that better.

Edwards also writes that “Borders stores are open for business”. The company will continue to maintain their current environment and broad inventory. Edwards does not say how this will affect the areas where 200 of its stores will be shuttered.

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Edwards notes that “Borders.com is operating as usual. We are fulfilling online orders as customers choose from among more than two million books, music, movies as well as other entertainment items.” He fails to add that Borders.com was not a successful enough e-commerce initiative to offset falling in-store sales. Borders.com traffic remains well behind Amazon.com and Barnes & Noble. There is no reason to think this will change. Borders does not have a widely marketed e-reader like the Kindle or Nook, either.

Edwards also fails to mention whether nervous book publishers will continue to provide products to Borders.

The letter is based on the cynical thinking employed by many troubled companies that tries to convince customers that we have everything under control while begging them not to take their business elsewhere.

Borders’ Business Operations Continue As Normal
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, we have determined the best route to undertake the necessary reorganization of our business is through the filing of a petition for reorganizational relief under Chapter 11 of the Bankruptcy Code.
Please be assured that during this reorganization period:
Borders stores are open for business. We will continue to provide our customers with a vast assortment of books in a warm and relaxing environment – and we intend to build on this. Our stores will continue to be places where families can gather to enjoy enriching events including author readings and signings, book clubs as well as kids storytime and parties.

Borders.com is operating as usual. We are fulfilling online orders as customers choose from among more than two million books, music, movies as well as other entertainment items.

Our Borders Rewards programs, including Borders Rewards Plus, remain in effect. Customers can continue to earn and redeem their Rewards in stores and on Borders.com and they’ll also continue receiving coupons. As always, we are honoring gift cards, which can be redeemed in stores and online at Borders.com.

Borders will continue to maintain its strong national presence. Our nationwide network of stores is a key foundation of the Borders brand. Borders, however, will be closing underperforming stores within our network over the next several weeks. Should your local store be affected, please visit Borders.com to find another Borders store near you, or to purchase our vast selection of books and other merchandise on-line.

Through this process, we intend to put in place a sound financial structure, enhance Borders’ technology to better benefit you, our customers and introduce new and exciting products related to our book offerings – all while providing you with great customer service

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.