Chain also announces the promotion of Quinnell, Winkelhaus to new posts
Last week's resignation of Phil Pfeffer as CEO of Borders Group Inc. caught company employees and the industry in general by surprise. Indeed, just days before the April 21 announcement, Pfeffer had been touring distribution centers with executives from one of the country's largest publishers. The company said the Pfeffer-Borders combination "was not a good fit," and that both sides felt it was "time to move on." Borders chairman Bob DiRomualdo will serve as president and CEO on an interim basis until a successor is found.
Pfeffer, who was unavailable for comment last week, joined Borders only last November after serving as president and chief operating officer of Random House for two years. At the time of his appointment, DiRomualdo called Pfeffer's knowledge of the content and logistics aspect of bookselling "invaluable," but sources said that Borders was growing impatient waiting for Pfeffer to initiate changes at the company.
Coinciding with Pfeffer's departure, Borders announced a number of management changes. Bruce Quinnell, who had been president and COO for Borders Group, was named vice-chairman, responsible for administration, investor relations and international operations. He will report to DiRomualdo. George Mrkonic will also continue serving as a vice-chairman.
Other appointments included the promotion of Kathy Winkelhaus to the newly created position of president of Borders Group Stores. She had been president of Waldenbooks. Ronald Staffieri, previously chief administrative officer, was named to succeed Winkelhaus. Richard Flanagan remains president of Borders Stores. Cedric Vanzura was appointed to a new post, president of Borders Online Inc. He had been senior v-p, electronic commerce and fulfillment services.
The combination of Pfeffer's resignation and the announcement that Borders's earnings would be below expectations resulted in a 14% decline in the company's stock to $14.63. The company said first quarter profits for its retail stores would be 4 cents to 5 cents per share and that its online operations would post a loss of 5 cents to 6 cents. The company said it was also taking a charge of 4 cents per share, approximately $3 million, in connection with Pfeffer's resignation.
