After More Layoffs, Will Borders Make a Play for Barnes & Noble?
Think that struggling book retailer Borders (BGP) was finished with layoffs in 2010? Think again. Nashville Business Journals reported Tuesday that the company has laid off 100 people at its La Vergne, Tenn., distribution facility, on top of 120 jobs already eliminated there earlier this year.
For those keeping score, that's Borders's fourth wave of layoffs, this one coming just two months after eliminating an unspecified number of people working in its now sold-off Paperchase stationery division.
What's more, it looks like Borders isn't stopping at 100 layoffs; DailyFinance has also learned that a number of bookstore staffers on the corporate level, specifically on the event marketing side, have also been let go.
Borders spokesperson Mary Davis declined to comment to DailyFinance about the additional rumored layoffs, but she did inform Nashville Business Journal by email that "We are in the process of reorganizing core areas of our business around key strategic objectives to transform the Borders brand. As part of this effort, we are making changes to our staffing levels to make sure the right people are in the right spots and positions and resources are aligned with our strategic objectives."
A Trick From the Old Corporate Raider Playbook?
As strategies go, a new round of layoffs can't help but signal desperation, or at least a profound lack of ideas, on the part of Borders and its two CEOs, Mike Edwards and chairman and chief shareholder Bennett Lebow. But with Amazon (AMZN) asserting its e-reader dominance with new Kindles, and Barnes & Noble (BKS) -- despite putting itself up for sale -- still in the digital game with its Nook device, new ideas may be at a premium for Borders -- if they even exist at all.
Which is why we're entertaining the notion that LeBow may pull a trick from his corporate raider playbook and put in a bid to buy Barnes & Noble. He used that very tactic in the mid-1980s when, as owner of computer company MAI, he tried to buy larger competitor Prime Computer in a hostile takeover bid. Things didn't end up so well for either company, as they both ended up filing for Chapter 11 bankruptcy and LeBow was out of the computer business entirely by 1995.
Chances are that move wouldn't work with Barnes & Noble, whose board of directors appears to favor whatever its founder and chairman Leonard Riggio wants to cook up, in the form of some kind of private investor group. But as Hail Mary moves go, Borders gunning for Barnes & Noble would be the ballsiest play of all -- even if the end result might imperil both book retailers.