Fasten your seat belts.

Borders is putting itself up for sale or may sell divisions. It has suspended its dividend. It is borrowing some $42.5 million from the hedge fund that is its largest shareholder. That fund may buy parts of the company and is being granted warrants for Borders stock that represent about 20% of the company. (Details below.)

Noting that "this will be a challenging year for retailers due to continued uncertainty in the economic environment" and that "the current credit environment has made many . . . alternatives prohibitively expensive or entirely unavailable," CEO George Jones said that the deal with Pershing provides "funding that gives us adequate opportunity to implement our plans this year and pursue a range of longer term solutions." Without the deal, "liquidity issues may otherwise have arisen in the next few months."

Jones added that Borders believes that its 2009 financial targets "remain attainable, yet within the current economic environment, we will be slowed in our progress and expect that we'll reach them later than originally planned. Still, we believe our strategic plan remains the right path toward achieving these goals." This plan includes the imminent launching of the company's website on its own, the spread of "new concept" stores that emphasize digital offerings, the display of more titles face out and a related reduction in inventory of 5%-10%, among other initiatives.

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Nearly lost in the flurry of news: in the four quarter ended February 2, total consolidated sales rose 2.8% to $1.3 billion. (All such calculations exclude the extra week in the fourth quarter of the previous year.) Net income was $64.7 million compared to a net loss of $73.6 million in the fourth quarter of the previous year. On an operating basis, fourth quarter income was $84.7 million compared to $87.7 million.

For the full year, sales rose 4.2% to $3.8 billion. The net loss was $157.4 million compared to a net loss of $151.3 million for the previous year. There was a $125.7 million charge this year from the sale of Borders's U.K. and Ireland stores.

In the fourth quarter, sales at U.S. Borders superstores rose 5.1% to $957.8 million and sales at Borders stores open at least a year rose 2.1%, the third consecutive quarter of same-store sales gains. Books sales rose 3.2% on a same-store basis but music fell 14.2%. Cafe and gifts and stationery were up 13.3% and 10%, respectively.

For the full year, Borders superstore sales rose 5.3% to $2.8 billion. Same-store sales for the year were up 1.5%.

In the fourth quarter, sales at the Waldenbooks specialty retail division, which includes some smaller Borders stores, fell 17% to $228.3 million. For the full year, sales fell 14.1% to $562.8 million. The decreases reflect the company's closing of 75 Waldenbooks stores during the year. Sales at Walden stores open at least a year rose 1.2% in the quarter and 2.2% for the year.

In the fourth quarter, international sales rose 34.6% to $138.5 million. Without the aid of a weak dollar, sales would have risen 24.3%. For the full year, sales rose 37.2% to $364.8 million (or 26.3% without the currency differential).

In the fourth quarter, international comp-store sales were up 9.3%, mainly because of strong sales in Asia Pacific stores. For the full year, comp-store sales were up 7.9%.

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For the "strategic review," Borders has hired J.P. Morgan Securities and Merrill Lynch to explore the sale of the company or of its divisions "for the purpose of maximizing shareholder value."

Under the terms of the financing commitment from Pershing Square Capital Management, which owns approximately 20% of company shares outright and has a representative and an ally on the board, Pershing may buy Borders's Australia, New Zealand and Singapore operations, its Paperchase subsidiary and its remaining interest in Borders U.K. for a "backstop purchase offer" of $125 million. Borders said it believes the businesses are worth "substantially more" than that amount, but said that "the relative certainty of this arrangement provides the company with valuable flexibility to pursue strategic alternatives." Borders can decline or require the sale and can sell to any other company. The offer runs until next January 15.

Borders granted Pershing Square 14.7 million warrants to purchase company stock for $7 a share for up to seven and a half years, an amount of stock equal to nearly 20% of fully diluted company shares. (Borders stock closed yesterday at $7.10, a low for the year and in the range of its opening price in 1995.)

The Pershing deal is binding on Pershing until April 4 during which time Borders can pursue alternative financing arrangements. Borders agreed not to issue any preferred stock or convertible securities without Pershing's approval while Pershing agreed not to sell or transfer any of its shares or warrants until the end of the year unless there is a change of control at Borders. Pershing also agreed that through the 2009 annual shareholders' meeting, it will not try to prevent Borders from maintaining a majority of independent directors. The full Borders board has approved the deal.

 

Wanting to continue "the dialogue established among the wholesalers, publishers and other interested parties" that was fostered when the EAN Transition Task Force helped introduce the 13-digit ISBN to the industry, the Book Industry Study Group has decided to retain the Task Force and expand its purview. It will now be known as the Publishers/Independent Wholesalers Interest Group (PIWIG) and will address such issues as the use of electronic data transmission and the importance of timely, accurate communications among trading partners.

The Interest Group will be chaired by Phil Madans of Hachette Book Group and will meet bi-monthly on the second Tuesday of the month. The meetings will take place in New York City at Hachette's offices at 237 Park Avenue. A conference line will be provided for those who cannot attend in person.
 
The first three meetings, which will run from 10 a.m.-12 p.m., will take place April 8, June 10 and August 12. For more information, e-mail info@bisg.org.

No word yet on how to pronounce PIWIG . . .

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Len Riggio Barnes & Noble Stock Purchase Watch:

On Monday and Tuesday, the chairman of B&N bought another 320,000 shares of company stock, in this case via B&N College Booksellers, a private entity that he owns. He purchased the shares for between $28.21 and $29.54 each, or a minimum of slightly more than $9 million. Riggio owns about 15.3 million shares of B&N, roughly 25% of the company stock outstanding.

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Before its evening awards presentation Saturday, March 29, at the Heathman Hotel in Portland, Ore. (Shelf Awareness, January 8, 2008), the Pacific Northwest Booksellers Association will hold a lunch, an ABA Forum and a session "Booksellers at the Tipping Point: Leveraging Localism and Independence to Promote Your Store." Participants will include the ABA's Avin Domnitz and Len Vlahos as well as ABA president Russ Lawrence of Chapter One Book Store, Hamilton, Mont.

Booksellers planning to attend the ABA Forum program should RSVP to sarah@bookweb.org.

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Congratulations to Susan L. Weis, proprietress of breathe books, Baltimore, Md., who was named Merchant of the Year by the Hampden Village Merchants Association, her local business association. She was cited for running a successful business, for many events that "bring lots of people to Hampden"--she has 73 planned in April alone--for being "a positive, creative force for our community" and for her work for the association, where she has been secretary for two years. (Incidentally, Benn Ray, owner of Atomic Books, is president.)

Weis, who is also on the ABA's Bookseller Advisory Council, contributes to New Age Retailer and last but not least does a column on New Age topics and is a reporter on occasion for Shelf Awareness, wrote: "I was very excited to win. My bookstore has only been open three and half years and to be recognized by my peers whom I greatly admire, was really wonderful.

"Fittingly for our eclectic, funky little neighborhood, the Merchant of the Year Award is a giant golden cup, reminiscent of a bowling trophy! Everyone who wins gets their name engraved on the side. The winner keeps the trophy until he or she must relinquish it to the next years' winner. I keep the cup atop a stand behind the counter. It's a nice reminder of what it means to be in business in a warm and caring independent business culture such as this little haven called Hampden in Baltimore."

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In what might be termed the dawn of Penguin Classics 2.0, CNET.com reported that "Penguin and start-up Six to Start launched their new ARG [alternate-reality game], We Tell Stories, a new-style game that its creators say is a hybrid of traditional story-telling, Web 2.0-style mashups, interactive games, and classic novels." Players can use "a Google Maps mashup to work their way through a brand-new story line based on John Buchan's famous novel, The Thirty-Nine Steps."

"We knew when we came up with the idea that using Google Maps (would allow) lots of movements," said Adrian Hon, chief of creative for Six to Start, "like running down streets and driving down roads. It's a bit like The Bourne Identity."

CNET added that, at the "end of the game's rainbow is a prize that any erudite player would certainly desire: Penguin's complete library of 1,300 books." Although the organizers anticipate attracting players from all over the world, the game is based in England and "only U.K. residents are eligible to win the library grand prize."

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Twenty lots of J.K. Rowling's books were auctioned off by Christies International for a total of £36,560 (US$73,000), dramatically exceeding a low presale estimate of £20,000 pounds.

According to Bloomerg News, a first edition of Harry Potter and the Philosopher's Stone that went for £4,000 "raised questions about Christie's controls after the London-based auction house confirmed that it didn't check whether the first edition . . . might have been stolen from the Northamptonshire Libraries & Information Service, whose label appears on the volume."

When Bloomberg asked the library to check the book's barcode number, it was confirmed that the library had "disposed of the book in 1999."

"Someone got lucky,'' said Grace Kempster, Northamptonshire's library-service manager.

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In other big bucks book news, a rare, inscribed copy of the 1937 first edition of J.R.R. Tolkien's The Hobbit sold at auction for £60,000 (US$118,873), according to the Guardian, which noted that the inscription was "a message of thanks to his friend Elaine Griffiths, who helped the author see the work into print."

 

Last Friday, booksellers from Pennsylvania to Washington, D.C., gathered at the Nassau Inn in Princeton, N.J., for the second annual Bookazine Kids Spring Arrivals Event. For the first time, the New Atlantic Independent Booksellers Association acted as joint sponsor.

The day started with round table discussions and a menu of topics. Eileen Dengler, NAIBA's executive director, told the group that this would be a test run for a format NAIBA plans to use at its fall conference. The association will set up executive round tables to encourage discreet discussions--bookstore owners in one room, frontline booksellers in another, children's book buyers in another, staff in another--with "agendas specific to their needs." Though attendees included people from general stores and even a mystery store considering getting into children's books, the theme and focus of the day's discussion was children's books. Each table had a moderator, and booksellers were given a table number when they arrived.

The day began with the round table discussions, followed by lunch. Afterwards Bookazine's Heather Doss presented her picks of the spring lists. Then authors and artists Daphne Grab, Daniel Kirk and Lizabeth Zindel presented and signed ARCs or finished copies of their new books.

Round table discussions ranged from how to run efficient and profitable school events in the store, to the advantages of coupons versus frequent-buyer discount cards, and also the best software for managing inventory and for sending out mass e-mails to customers. At her table, Margot Sage-EL, owner of Watchung Booksellers, Montclair, N.J., talked about what she learned at the ABA's Winter Institute concerning how AMIBA (the American Independent Business Alliance) works and talked about that organization's suggestion that the bookstore, as the community's center, should lead the shop-local campaign. Stephanie Anderson, assistant buyer at Moravian Book Shop in Bethlehem, Pa., discussed the challenges of getting teens to come to the store; as an alternative, she has organized IM chats between YA authors and teens, posted the transcript in her blog, bookavore, and asked publishers to send signed book plates in connection with the event.

Seasoned round table participants, such as Hannah Schwartz, owner of Children's Book World, Haverford, Pa., would have preferred having each round table assigned a topic, so booksellers could explore the topics that interested them. However, Schwartz liked that, in several instances, the owner and book buyer from the same store were seated at the same round tables, "The idea of working with owners and book buyers together is a good idea. I think we serve each other's interests better," Schwartz said. Similarly Sage-EL said, "You do benefit sometimes from talking to someone else in another capacity. I remember years ago meeting someone in receiving at Politics & Prose. We came back and changed a lot of our procedures as a result of that conversation."

Some booksellers expressed a wish to have mingled more with others not assigned to their tables. Those new to the discussions gleaned a great deal from the veterans, such as how to run a book fair or how to keep customers coming back. As Politics & Prose children's manager Dara La Porte put it, "I think you always learn the most when you're talking to other booksellers. You may not find out the thing on the agenda, but you might find a nugget you weren't necessarily looking for." For her, it was finding out about Constant Contact, the program for large e-mailings. For Schwartz, it was hearing about a title from Heather Doss that, she decided after Doss's presentation, she had not ordered in a high enough quantity. Sage-El enjoyed hearing the authors speak, and though she sees a lot of reps and was familiar with many of the books in Doss's presentation, she appreciated that Doss picked out the debut authors and artists.
 
As attendees lined up for lunch, some were raving about new books they'd read, and others were continuing issues-related discussions begun during their round table conversations. All in all, there was something for everyone.--Jennifer M. Brown

 

Today on Fresh Air: Nick Trout, animal surgeon and author of the new memoir, Tell Me Where It Hurts: A Day of Humor, Healing and Hope in My Life as an Animal Surgeon (Broadway, $22.95, 9780767926430/0767926439).

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Tomorrow on PBS's Now: Mark Schapiro, author of Exposed: The Toxic Chemistry of Everyday Products and What's at Stake for American Power (Chelsea Green, $22.95, 9781933392158/1933392150).

 

Book TV airs on C-Span 2 from 8 a.m. Saturday to 8 a.m. Monday and focuses on political and historical books as well as the book industry. The following are highlights for this coming weekend. For more information, go to Book TV's website.

Saturday, March 22

10 a.m. Michael Shermer, author of The Mind of the Market: Compassionate Apes, Competitive Humans, and Other Tales from Evolutionary Economics (Times Books, $26, 9780805078329/0805078320), analyzes the evolutionary basis for our thinking on economics. (Re-airs Sunday at 10 p.m.)

6 p.m. Encore Book Notes. From a segment first aired in 1990, Carol Barkalow, author of In the Men's House: An Inside Account of Life in the Army by One of West Point's First Female Graduates, talked about the demanding physical training at the academy and the emotional and mental hazing female cadets underwent.

7 p.m. Robert Bennett, author of In the Ring: The Trials of a Washington Lawyer (Crown, $27.50, 9780307394439/0307394433), chronicles his life, from growing up in Brooklyn to representing high-profile clients in the courtroom. (Re-airs Sunday at 1 a.m. and Sunday, April 6, at 11p.m.)

8 p.m. Geoffrey Stone, author of Top Secret: When Our Government Keeps Us in the Dark (Rowman & Littlefield, $19.95, 9780742558854/0742558851), discusses the government's desire to keep documents classified and the public's right to know. (Re-airs Sunday at 1:45 p.m.)

10 p.m. After Words. Bob Schieffer, chief Washington correspondent for CBS News, interviews Carl Cannon, co-author of Reagan's Disciple: George W. Bush's Troubled Quest for a Presidential Legacy (PublicAffairs, $27.95, 9781586484484/1586484486), about the current administration's desire to be the successor to the Reagan presidency. (Re-airs Sunday at 6 p.m. and 9 p.m., Monday at 12 a.m. and Sunday, March 30, at 12 p.m.)

 

Nominees for the 2008 Thriller Awards, which are sponsored by International Thriller Writers and whose winners will be announced at the ThrillerFest Gala Banquet on July 12 in New York City, are:

Best Novel

• No Time for Goodbye by Linwood Barclay (Bantam)
• The Watchman by Robert Crais (S&S)
• The Ghost by Robert Harris (S&S)
• The Crime Writer by Gregg Hurwitz (Viking)
• Trouble by Jesse Kellerman (Putnam)

Best First Novel

• Interred With Their Bones by Jennifer Lee Carrell (Dutton)
• Big City, Bad Blood by Sean Chercover (Morrow)
• From the Depths by Gerry Doyle (McBook Press)
• Volk's Game by Brent Ghelfi (Holt)
• Heart-Shaped Box by Joe Hill (Morrow)

Best Paperback Original

• The Last Nightingale by Anthony Flacco (Ballantine)
• A Thousand Bones by P.J. Parrish (Pocket)
• The Midnight Road by Tom Piccirilli (Bantam)
• The Queen of Bedlam by Robert McCammon (Pocket)
• Shattered by Jay Bonansinga (Pinnacle)

 

Sergio Makes a Splash! by Edel Rodriguez (Little, Brown, $15.99, 9780316066167/0316066168, 40 pp., ages 4-8, May)

What does one do with a bird born to swim who won't? Why, encourage him to overcome his anxiety, of course! As Sergio's penguin peers coax him to come on in, the water's fine, youngsters will feel the lure, too. A palette of just four colors--black and white, naturally; a blue that children will instantly recognize as the chlorine-tinted color of their backyard and neighborhood pools, and life-preserver orange--lends the tale a retro feel despite its timeless topic, and suggests that this has been a struggle for generations of timid swimmers. In the first picture book he has both written and illustrated, Rodriguez (Oye, Celia!; Float Like a Butterfly) gets the pacing just right, as he shows the penguin's pals enumerating the things he loves ("fishies, . . . a cold bath"), all of which may be found in the depths of the Antarctic Ocean. In the tense moment after Sergio takes the plunge, the penguin hero is completely submerged, with nary a bubble as evidence of his presence on the full-bleed spread of pristine pool-blue; only a small orange sun in the upper right corner presides over the scene (as, offstage, "Sergio's friends and Mrs. Waddle watch and wait"). In the next spread, Sergio surfaces in a cascade of froth. Children will identify with the hesitant penguin's fear and cheer him on as he conquers it in triumph.--Jennifer M. Brown

 

"So many books, so little time." It's not just booksellers and readers who chant this lament; book reviewers have an added burden. Guilt. There is much published that is worthy of notice, but both time and space are limited. So we are introducing Shelf Sample: a review-ette, as it were, with an excerpt of a book we really like, brief and hopefully intriguing.

Wendy Johnson, author of Gardening at the Dragon's Gate (Bantam, $25 trade paper original, 9780553378030, March 4, 2008), has been meditating and gardening at Green Gulch Zen Center in northern California for more than 30 years. In this 447-page tome, she writes of everything one could wish for, from the art and practice of watering the garden, to pruning roses, to kitchen-generated garden sprays, to the pleasures of walking in the garden under a full moon. Beautifully illustrated by Davis Te Selle, laced with tasty recipes, filled with wisdom, this is a book that propagates dreams and plans. From the book:

"I am a garden dreamer, but a practical one, rooted in working the round and sustained by pushing wheelbarrows full of growing plants. The garden will never be a metaphor for me, but always an actual place of danger and wanton beauty. When I walk into a garden I step into paradise with an address, paradise located on earth."