DOW JONES NEWSWIRES

Borders Group Inc. (BGP) named Pershing Square Capital partner Richard McGuire as chairman as a management shakeup aimed at driving a turnaround continues at the books and music retailer.

Pershing Square is Borders' largest shareholder and has been pressing for change at the company for the last year.

Larry Pollock, 61 years old, has been chairman since July 2006 and a board member since 1995. He will remain a director.

The naming of McGuire, 32, comes a week after Borders named Ron Marshall, a private equity executive with experience in corporate turnarounds, as chief executive.

"[McGuire] is extremely smart and capable," said Pershing Square founder and Chief Executive Officer Bill Ackman. "As a major shareholder of Borders, I am delighted with [McGuire's] appointment to chairman. I look forward to the company's progress under [McGuire's] and CEO Ron Marshall's stewardship."

Marshall added that "In the short time that I have worked with [McGuire], I am impressed with his constructive input, sound judgment and overall support of the company."

When Marshall's appointment was announced, Pollock observed that despite the company's progress in numerous areas, it was "imperative" that Borders "more aggressively attack these initiatives to address its long-term future."

In recent weeks, many book publishers have expressed concern about the future of Borders, which has a heavy debt load. Revenue continues to lag, with same-store sales down 14% in November and December.

Other recent executive changes include a new financial chief, head of merchandising and marketing, and filling the new post of chief administrative officer.

Borders shares were down a penny premarket to 60 cents.

-By Mike Barris, Dow Jones Newswires; 201-938-5658; mike.barris@dowjones.com

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