Borders Group Inc said on Tuesday that Richard “Mick” McGuire, an outgoing partner at Pershing Square Capital Management, will become non-executive chairman at the bookseller, sparking a jump in its shares.
The appointment is the latest major leadership change at Borders, the No. 2 U.S. book chain, which named a new chief executive and chief financial officer last week.
The company’s sales fell more than 14 percent at stores open at least a year during the key holiday shopping season and has suffered as consumers cut spending during the recession.
McGuire, 32, joined the Borders board in January 2008 as part of his role at Pershing, the hedge fund that is also Borders’ largest investor. Borders said McGuire was now leaving Pershing Square to pursue entrepreneurial interests.
Pershing Square has gained attention by pushing for change at corporations including Target Corp and Wendys/Arbys Group Inc.
The hedge fund helped Borders out of a liquidity crisis earlier this year with a $42.5 million loan in exchange for options, and was involved in further alternative financing discussions with the bookseller this fall.
In March, Borders put itself up for sale, but that option eventually fizzled.
The company operates more than 1,100 book stores under the Borders and Waldenbooks names, making it the No. 2 U.S. book chain behind Barnes & Noble Inc.
Earlier this month, George Jones, who had served as Border’s CEO since mid-2006, was replaced by private equity executive Ron Marshall. Mark Bierley was named CFO, replacing Ed Wilhelm.
McGuire’s appointment takes effect on Tuesday. He replaces Larry Pollock, 61, who served as nonexecutive chairman since July 2006 and will remain on the board.
Michael Archbold was named lead director at Borders. Archbold, 48, is chief operating officer and CFO at the Vitamin Shoppe Industries Inc.