Ben LeBow Named New Borders CEO
Interim CEO Michael Edwards Stays On
Published: 06/04/2010, Last Updated: 06/07/2010 01:57am
Bennett S. LeBow, who recently invested $25 million in the cash-strapped Borders Group (see "Borders Gets Fresh Money"), has been named Chief Executive Officer of The Borders Group as well as Chairman of the Board. Interim Borders CEO Michael Edwards will remain as President and CEO of Borders, Inc. Edwards, who will report to LeBow, will handle day-to-day operations and run Borders’
LeBow’s investment gives him 15.5% stake in Borders, which means that he is now the company's largest single shareholder with more shares than the activist investor William Ackman’s Pershing Square Capital Management.
As Edwards explained in the company’s most recent earnings call transcript, Borders is prepping an aggressive move into the ebook and ereader business with a low-cost $149 Kobo e-reader that it will introduce this summer and hopes to tap LeBow’s Wall St. connections as it looks to implement its digital strategy. Edwards told Reuters: “Ben has a very sound financial background, understands capital markets, is very astute in managing liquidity in turnaround situations and has a very strong network.”
Pop culture retailers with long memories will recall how LeBow as chairman of the Brooke Group, which operated the Liggett tobacco company and Impel Marketing/Skybox Trading cards, managed to transform a company that was a cash cow with sharply increasing earnings and more than twice as much cash on its balance sheet as debt into what the Wall St. Journal termed “a virtual junk bond” by saddling the Brooke Group with $300 million in costly high yield debt from LeBow’s ill-fated investments in Western Union and MAI Systems.”
The always colorful Lud Denny, who ran ProSet, a company that specialized in NFL cards that were initially distributed by Skybox, famously described LeBow as “so cold that he would shoot his own mother just to get an invitation to an orphan’s picnic.”
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