Borders Group Inc. (BGP) cut another 136 corporate jobs, or
about 12% of its corporate work force, as the struggling books and
music retailer looks to cut costs amid its turnaround.
Earlier this month, the company eliminated several high-level
corporate positions to reduce management layers. The latest job
cuts amount to 1% of the work force.
Shares were recently up 3.9% to 53 cents. Although the stock is
up 33% so far this year, it has still lost 95% of its value in the
last 12 months.
New Chief Executive Ron Marshall on Thursday called the layoffs
a necessary step as the company tries to get back on track
financially.
Borders and its largest shareholder, Pershing Square Capital
Management LP, earlier this month again extended the expiration
date of their agreement for Pershing Square to buy Borders'
U.K.-based Paperchase gifts and stationery business. The deadline
for Borders to repay a $42.5 million loan from Pershing Square made
earlier this year was also extended to April 15.
Last month, Borders ousted its chief executive and his
management team, installing Marshall, who has a strong financial
background.
The book chain, like almost all retailers, had a disappointing
holiday season. But its problems stretch back considerably further.
Last March, the company disclosed it faced a potential liquidity
crunch and put itself up for sale. Despite its weak stock price,
Borders couldn't find a buyer.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com