Question: What has been your greatest challenge?
George Jones: I think the greatest challenge I’ve had at Borders has been to be able to take our strategic plan, which we feel still is the right plan, but to be able to continue and be able to stay on track with that in what has been a very challenging economic environment and the overall retail climate out there. If you look at retail sales that have been reported so far this year, they as far as- they’ve been the worst I’ve seen in my entire career as far as how pervasive they are. There are so many companies out there that are having a hard time generating positive sales and there are some exceptions and certainly people that are in gasoline, selling gasoline, or if you’re selling food or certain companies that might have been more positively affected by the economic stimulus checks, etc. Those were all positives that might have helped some but most of the retailers out there and the CEOs and the people I’ve talked to it’s a very, very tough environment out there. So that challenge is exacerbated if you’re a company that’s in the midst of a turnaround and you have a very high debt, which is not-- High debt is not a great thing to have any time but it’s especially onerous if you’re in an economic period that’s as challenging as this one. So that’s the reason we made it as the primary objective at the start of this year to improve our cash flow and lower our debt and we’ve done that very successfully. The first quarter we lowered our debt by over $130 million, which was significant. We went from in the low 700 millions down to about 580 million and we’ve continued to move forward on that with the sale of Australia, New Zealand, Singapore, another $90 million coming in for that to lower debt, and the continued progress we’ve made in cutting expenses and managing our inventories better and prioritizing our capital spending. And this is making huge progress for our company in terms of getting us into a much, much healthier position in spite of the fact that sales are challenging right now but you know what. We’re going to do the right things. We’re going to run our business right and we’re still going to stay very focused on sales and we’re doing I think better than most out there on it as far as on sales, but eventually if we do the right things the economic climate will change and the retail business will start perking back up and we’ll be in a great position to really deliver substantially improved profitability at that point in time.
Recorded on: 6/18/08