Borders changes CEO again

Borders announced this week that its CEO over the past year is leaving the company, to be replaced in the top job by its head merchant. It’s hard after one year to condemn the departing CEO when so many of the company’s challenges have to do with long-term execution and strategic brand management. Here’s my take from Retail Wire:

Here’s an example of the sort of nuts & bolts issue that is holding back Borders: If you try ordering “Game Change,” the best-selling non-fiction book in the country, you’ll find it in stock at Amazon but on two weeks’ back-order at borders.com. And doing a bricks-and-mortar search for the same title shows about half the stores in my trading area to be out of stock.

It’s very hard for the also-ran in the bricks-and-mortar book business to compete at this level of execution. Barnes & Noble is showing sales growth at its website that will start to offset comp sales declines at its physical stores. (And these sales drops are more modest than Borders to begin with.) If B&N capitalizes on the e-book trend with its own device and compatible items like the Apple tablet, it has a credible long-term way to compete against Amazon.

Meantime, Borders has struggled for years with a viable competitive argument to shop its stores. It has withdrawn from a lot of the music and video business that once gave it a brand identity, but it’s left with overspaced stores as a result. But the bottom line: It doesn’t matter whether the new CEO is focused on the balance sheet or on branding initiatives until he or she gets the execution right.

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