"Whenever a business goes broke, the first questions to be asked should be of the management and the owners, not of the government. Borders / A&R in its REDgroup incarnation was a very badly run business, for which the owners, Pacific Equity Partners, a private-equity group, are responsible.
"As I see it, PEP deliberately created a brutalist regime: they installed bovver-boy managers who alienated all their inherited knowledgeable staff (who left), made appalling decisions about stock selection and presentation, and tried to treat books like potatoes. They were focused on fluffing up the business so it could be floated, so all they seemed to care about was inventory control and their cash position. As they tormented their suppliers who understood their business better than they did things started to go badly wrong. The group kept refusing to listen to well-informed and well-intentioned advice, so their business declined drastically. Eventually, several times last year, the group was 'on stop' with major publishers that is, the publishers refused to supply books to them because the group was in breach of its credit limits and trading terms.
"The supermarket model that REDgroup had adopted was a grotesque failure."
the full article
No comments:
Post a Comment