NEW YORK — Borders Group Inc., the No. 2 traditional U.S. bookseller, said Tuesday its CEO Ron Marshall is leaving after about a year with the company to accept the CEO post at another retailer Borders didn't name.
Marshall's departure leaves Borders scrambling to find its fourth CEO in five years and follows a disappointing holiday season and three straight quarterly losses.
Borders named Marshall as CEO and president last January to replace George Jones. Marshall, founder of private equity firm Wildridge Capital Management, was hired for his turnaround skills, having been involved in other turnaround projects as CEO of food distributor and retailer Nash Finch Co. and as chief financial officer of Pathmark Stores Inc., now a unit of the Great Atlantic & Pacific Tea Co.
Marshall struggled to make a mark with Borders, said Michael Norris, senior trade analyst at Simba Information.
"Ron never answered the question that I had since he took over year ago, 'Why should I shop at Borders?' " Norris said. "Improving the cash flow by itself doesn't do much to improve customer flow."
The choice of a new CEO "needs to make the Borders brand really mean something," Norris said. "You have to give consumers a compelling reason to go to the stores when consumers can literally pull out a smart phone and access any content they want."
Borders said its working with a Korn/Ferry International to find a permanent replacement.
In the meantime, Chief Merchandising Officer Michael Edwards, 49, will serve as interim CEO. Edwards joined Borders in September and will report to Chairman Mick McGuire. Marshall is expected to with the transition.
Norris said Edwards is a good choice in the interim.
"You're going from a guy who ate spreadsheets for breakfast, lunch and dinner to someone well versed in creating branding initiatives," he said.
Borders has struggled with increased competition from online rivals and discounters, declining music sales, and consumers curtailing their spending during the recession. Borders reported last week that sales at its namesake superstores open at least a year were down 14.6 percent for the crucial holiday period.
The company last month announced its entry into the electronic book market with Canada's Kobo Inc., but that announcement seemed belated after chief rival Barnes & Noble announced its own dedicated e-reader, the Nook, earlier this year. Amazon.com's Kindle has dominated the e-reader market.
Borders has cut jobs and shuttered stores to boost its finances while also shifting its focus from less-profitable categories such as music in order to concentrate more on children's books, toys, stationery and its cafe.
The chain announced in November that it would close 200 Waldenbooks and Borders Express stores and cut 1,500 jobs this month in order to become more profitable.
Borders, based in Ann Arbor, Mich., runs Waldenbooks and its namesake stores.
Shares fell 17 cents, or 16 percent, to 92 cents.
AP Retail Writer Michelle Chapman contributed to this report from New York.