DOW JONES NEWSWIRES
Borders Group Inc. (BGP) said Thursday that Chairman Bennett
LeBow also would become chief executive of the struggling
bookseller, and named interim CEO Mike Edwards as president of
Borders Group and president and chief executive of its principal
unit, Borders Inc.
Last month, LeBow, a financier and chairman of Vector Group Ltd.
(VGR), agreed to invest $25 million in Borders in a deal that put
him in charge of the company. The investment gave him roughly 15%
of shares outstanding and the chance to increase his stake to
35%.
Edwards, 50 years old, who will report to LeBow, was named
interim chief executive in January, when Ron Marshall left to
become CEO at Great Atlantic & Pacific Tea Co. (GAP) a year
after taking the job. A turnaround specialist with a strong
financial background, Marshall was credited with reducing Borders'
debt, cutting its expenses and building the publishing community's
confidence in the struggling retail chain.
Edwards joined the company last September as chief merchandising
officer after serving as president and chief executive of Ellington
Leather, a leather handbags and accessories wholesaler.
Borders, the nation's second-largest bookstore chain by revenue,
after Barnes & Noble Inc. (BKS), last month reported its fiscal
first-quarter loss narrowed as warrant costs dropped by more than
half, but revenue slid more than analysts expected.
Borders has suffered mightily from dwindling sales as consumer
spending slid in the recession and as more readers take to digital
copies of books.
Its shares closed up 6.4% at $1.67 on Thursday and were inactive
after hours. The stock has gained 42% this year.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
kathy.shwiff@dowjones.com