January 21 – January 28, 2010 Edition

Borders Holiday Sales Take Sharp Decline

ANN ARBOR, MICH/AUTHORLINK NEWS/January 18, 2010—Borders Group this week reported that consolidated sales for the 11-week holiday period ended Jan. 16, 2010 declined 13.7% from the same period last year to $846.8 million.

Within the Borders superstore segment, total sales for the period were $649.2 million, a 14.7% decrease from a year ago. Comparable store sales at Borders superstores declined 14.6%. Factoring out multimedia, comparable store sales at Borders superstores declined 10.9%. The company reduced promotional spending in December, and as a result, gross margins for the month improved 130 basis points compared to a year ago.

Within the Waldenbooks Specialty Retail segment, total sales for the holiday period were $153.2 million, a 14.6% decrease year over year. Comparable store sales for Waldenbooks stores that will remain open beyond the end of this month declined 9.4%. Excluding currency impact, total International segment sales were $44.4 million for the period, an 8.7% increase. Comparable stores sales at Paperchase stores outside the U.S. increased by 10.1% for the period.

“We are disappointed with holiday results and must intensify our focus on creating and delivering a shopping experience that drives profitable sales,” said Borders Group Chief Executive Officer Ron Marshall. “Given the sales challenge, we have continued to manage cash flow and have taken several important steps in line with our strategic priorities, including moving away from underperforming, low margin categories such as music and video in favor of better performing categories such as children’s. The decision to exit multimedia is right long-term, but impacted comp store sales by 3.7%. In addition, as previously announced, we are right-sizing the mall business with the closure of 182 Waldenbooks Specialty Retail stores. We have continued to expand our Borders Rewards loyalty program and recently announced digital book partnerships with Kobo and Spring Design that position Borders to be a high quality content provider of eBooks. We will continue to focus on reducing expenses and improving working capital to drive improved cash flow and debt reduction as we address the clear priority to drive profitable sales.”

Headquartered in Ann Arbor, Mich., Borders Group, Inc. is a leading specialty retailer of books as well as other educational and entertainment items. The company employs approximately 25,000 throughout the U.S., primarily in its Borders(R) and Waldenbooks(R) stores. Online shopping is offered through