Tuesday, January 25, 2011

With Sale of Day by Day Kiosks to Calendar Club, Borders Raises Some Cash


It remains to be seen whether publishers will accept Borders' proposed plans for renegotiating credit arrangements by the reported February 1 deadline, but the retailer will get at least some cash from the sale of its seasonal calendar kiosk service, Day By Day Calendars, to competitor Calendar Club LLC. The purchase, under negotiation for some time, closed last Wednesday and was announced to Borders staff on Friday by CEO Mike Edwards.

In a telephone interview, Calendar Club CEO Marc Winkelman said the deal has been in the works since the fall, when Borders approached Calendar Club along with other prospective buyers. (Winkelman is also CEO of Kirkus Media and holds a small stake in the company alongside principal owner Herb Simon.) Since the calendar selling season runs from September 1 through the end of January and Borders had "signed leases for this season, it didn't make sense for us to take over operation [of Day by Day] in the midst of this season," Winkleman said. Borders will run operations for Day by Day's approximately 420 freestanding and in-store locations through the end of the month, after which Calendar Club will take over.

Winkelman indicated financial terms could not be disclosed now due to confidentiality agreements, though Borders spokesperson Mary Davis said further details about the deal would be revealed in Borders' upcoming Q4 financial release (for which a date had not been set) and 10Q filing. Winkelman said the purchase of Day by Day "is an extension of what we're doing. We've been competitors since 1993 in this space, and on occasion we've talked about combining the business, so this was a natural."

There was, however, no thought to acquiring anything else from Borders, or even the holdings of the entire company. "First of all, Borders is a very big company with lots of issues right now because of what's going on with the book industry. [Acquiring Borders] was not something that interested me." As Winkelman noted, "We're quite close to B&N [and] we're quite fond of that relationship which goes back to 1990. And at the same time, in terms of the health of the book industry, we wish the people at Borders success."

Calendar Club was a subsidiary of B&N until 2009, when co-founder Winkelman bought out the bookseller's majority stake (said to be 75 percent) for $7 million in cash and notes. - S.W.

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