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Borders Group Reports Q3 2009 Losses

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November 26 – December 3, 2009 Edition BN Bookstore Sales Improve in Second Quarter

ANN ARBOR, Mich. (Authorlink News, November 24, 2009) — Borders Group today reported an operating  loss of $39.0 million for the fiscal third quarter ended October 31, 2009, equal to the loss it took in the same period of 2008.  

On a GAAP basis, the loss from continuing operations for the current quarter was $38.5 million, compared to a loss of $172.2 million a year ago.  

Year to date, on an operating basis, the company generated a loss from continuing operations of $67.6 million compared to a loss of $80.0 million or $1.33 per share a year ago. On a GAAP basis, the year-to-date loss from continuing operations was $170.1 million compared to a loss of $213.6 million or $3.55 per share a year ago.

Comparable store sales declined by 12.1% and 7.2% at Borders superstores and Waldenbooks Specialty Retail stores, respectively. Excluding multimedia, comparable store sales at Borders declined by 8.5%.

Total consolidated sales were $595.5 million, down $86.6 million, or 12.7%. Inventory was reduced by $99.1 million, led by the reduction in multimedia inventory of $70.4 million. Debt, net of cash, at the end of the third quarter was $375.0 million, a reduction from the prior year of $112.0 million, or 23.0%. Debt, net of cash, compared to year-end levels increased by $92.4 million, or 32.7% as inventory was added to core book categories throughout the third quarter.  

"During the third quarter, we prepared for the upcoming holiday selling season," said Borders Group Chief Executive Officer Ron Marshall. "We increased core book inventories, experimented with a range of traffic-driving and in-store promotions and invested in store payroll to get books out on the shelves and our stores in top condition to receive customers. To ensure that our customers are confident in our holiday selection, we recently launched what we believe is book retailing’s first-ever in-stock guarantee. If a customer comes to shop at Borders and finds us out of stock on an item — and that item is among the more than one million titles on Borders.com — we will order the item for the customer, ship it to her at home and the shipping charges will be on us. There will be no wasted shopping trips for our customers this season."