Publishers appear willing to adopt a tough stance in negotiations with Borders this week regarding the chain’s need for new payment and finance terms. While Borders is meeting separately with the major New York houses, there appears to be sentiment among some of the publishers to use a mediator to negotiate on their behalf. Publishers are prohibited by law from meeting as a group to discuss terms with their vendors. And while Borders is believed to want a quick answer from publishers, the houses aren’t necessarily eager to make an immediate decision, and it is far from clear if all the houses will go along with Borders’ proposal. As reported by PW Daily Monday, Borders wants to exchange what it currently owes houses for a note, and to extend some due dates.
While the talks unfold—on Wednesday morning Borders had yet to meet with the largest publishers among the big six—more executives have left the retailer. The Wall Street Journal reported that Larry Norton, senior v-p business development, Tony Grant, v-p of real estate, and Bill Dandy, senior v-p of marketing had left as part of reorganization. A spokesperson had no comment on the WSJ report, and repeated a comment made yesterday when general counsel Thomas Carney and CIO D. Scott Laverty resigned, which said Borders has taken steps to reorganize its management team to reflect its current needs, which includes improving liquidity.
Even as Borders and publishers negotiate, competitors continue to raise questions about fairness of treating one account different from others. Yesterday B&N it would expect publishers to offer the same terms to all booksellers, B&N as well as independent booksellers. Roxanne Coady, owner of RJ Julia Booksellers, said she believes this could be an opportunity for publishers to revisit their relationship with booksellers. If Borders problems are more reflective of systematic issues that mismanagement, Coady said this might be a chance for publishers and bricks and mortar bookstores to think about new structures and arrangements that balance three objectives. Coady sees those objectives as 1) customers having a place to see and discover books; 2) a payment structure that motivates and allows stores to merchandise books and keep them on the shelf; 3) increased sales that compensates publishers for deferral of payment.
