Nicola Buys Borders
An independent's surprising investment
by Vickie Elmer
"They have improved their chances no end by putting him in charge," says Nicola Rooney.
Rooney is the owner of Nicola's Books in Westgate Shopping Center. Surprisingly, the person she's praising is the new CEO of Borders Inc., Ron Marshall.
Book superstores are often thought of as the enemy of independent booksellers, but Rooney doesn't wish her megacompetitor ill. When many investors soured on the Ann Arbor-based company after its stock collapsed, Rooney saw an opportunity. She bought Borders shares last November, when the price fell from around $3 to 65¢ a share.
Rooney won't say how much stock she owns, but she was one of only a handful of stockholders who showed up for the company's annual meeting in Ypsilanti in May. She says that Marshall, a turnaround and cost-cutting specialist hired in January, is making lots of "sensible decisions," and she appreciated his honesty in acknowledging that Borders officials had "lost their way." In recent years, books were pushed into the background as the stores added everything from action figures and board games to lollipops and yoga mats.
Rooney agrees with Marshall that Borders needs to return to its roots, but says it won't be easy-not just because of the tough economic climate, but also because Marshall will need to "change the behavior of every single person in the company" to reemphasize bookselling. She notes that sales at Barnes & Noble stores have held up better than Borders, and praises B&N's top managers as "book people through and through."
With the broader market recovery, Borders stock was up to $3.35 in mid-June. But Rooney is in no rush to cash out. She bought the shares, she says, "because they'll be good for my retirement fund."
[Originally published in July, 2009.]