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Borders Unveils First Concept Store Digital Features Abound

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MAIN NEWS HEADLINES
February 21 – February 28, 2008 Edition

Borders Unveils

First Concept Store;

Digital Features Abound

ANN ARBOR, MI/02/21/08—Borders will unveil the first of its highly anticipated new concept stores February 22 with the grand opening of its Ann Arbor, Mich store in the company’s hometown. The 28,900-square-foot concept store—the first of 14 the company expects to open nationwide this year—represents a significant enhancement over existing Borders stores inside and out and fulfills the company’s mission to be a headquarters for knowledge and entertainment. The store concept has been in development for more than 18 months.

"This is a completely new shopping experience that sets Borders apart from every other store," said Borders Group Chief Executive Officer George Jones. "We’ve stayed true to what our customers have always loved about Borders—deep and intelligent selection, knowledgeable staff, and a comfortable, welcoming atmosphere. Yet, we’ve brought a fresh new look and an exciting interactive dimension to the store with a Digital Center where customers can do everything from mix and make their own custom CDs, download books and music, publish their own books, explore their family history, and create photo books—all without being computer experts because we have trained people there to help every step of the way," he said.

"In addition, we’ve put a strong focus on popular categories—including Travel, Cooking, Wellness, Graphic Novels and Children’s—by incorporating digital options and the online world, making these sections of the store interactive destinations where customers can not only shop our vast selection of books, but also take advantage of computer kiosks featuring recommendations from our expert buyers, related video content including interviews with experts and authors, and much more. In addition, in select destinations, there are large in-section LCD screens broadcasting a depth of content featuring some highly recognizable names in these subject areas, as well as Borders’ own exclusive programs," Jones continued.

"Overall, this new concept store is a key part of our long-term strategic plan. We set out to differentiate Borders and give customers a reason to choose us over other retailers and we’ve achieved that goal spectacularly with this new concept store. And, once we’ve launched the new Borders.com, we’ll be able to truly deliver on our cross-channel retail strategy including the option for customers to access the site in our stores to view wish lists and conveniently order from millions of titles for delivery to their homes within two days. I’m proud of what we’ve created and am confident that customers will really embrace it."

Beginning with the exterior of the concept store, shoppers will see that this new Borders is a bit bolder with a modern fascia featuring enormous windows, a large illuminated and underlined red Borders logo, and a louvered construction that evokes images of the pages of a book. There is a cafe with an adjoining outdoor seating area for warm weather and dramatic up-lighting and exterior fixtures that make the store stand out against the evening sky, providing a welcoming glow.

Inside, curved feature tables highlight the latest book titles front and center and a special illuminated stand spotlights noteworthy items. A large round rotunda with three skylights fills the space with light, and the warm, neutral color scheme, cozy seating, and walnut- and ash-stained fixtures suggest comfort and an invitation for shoppers to stay as long as they like. Throughout the store, there are large, illuminated drums suspended from the ceiling that feature dazzling graphics and guide customers to destinations within the store. Overall, the layout remains conducive to exploration while also being extremely intuitive for customers to navigate with ease.

Digital Center

A new Digital Center marked by a three-dimensional, 15-foot illuminated fixture and sign package. Within the Digital Center there are multiple computer kiosks and stations dedicated to unique new services including music and book downloading as well as mixing and making custom CDs through "Borders Digital Music," which features millions of titles to choose from.

Customers interested in tracing their roots can access "Borders Genealogy Services" provided by Ancestry.com, and because many Borders customers are authors looking to publish their own work, the Digital Center also includes "Borders Personal Publishing" powered by Lulu.com. Some customer-written books may eventually be sold in Borders stores and select customer authors could even host in-store signings. Photos are important to many Borders customers who can use "Borders Custom Photo Books" for special projects featuring family and friends, and they can print their photos in the store via "Borders Digital Photo Printing."

Throughout the Digital Center, there are seats at the various computer stations where customers are encouraged to sit and take their time working on their projects. Importantly, Borders knows that not all customers are computer experts, so the company is staffing the Digital Center with trained, dedicated personnel ready to guide customers of any technical level through the process to achieve their project goals.

In addition to the Digital Center, Borders has retained its popular computer information stations—"Borders Search"—to help customers locate titles within the store and outside of the store and learn about in-store events, among other services. As in existing Borders stores, the stations are located throughout the concept store allowing customers to help themselves.

Destinations: Travel, Cooking, Wellness, Graphic Novels and Children’s

Certain categories within the new Borders concept store—Travel, Cooking, Wellness, Graphic Novels and Children’s—have been designated as "destinations" within the new concept store—giving these categories their own "shop within a shop" look and feel. For example, in the Travel Destination, customers can not only choose from more than 3,200 book titles, but will also find related items such as maps, GPS navigation systems, the Reader Digital Book from Sony®, and portable DVD players that customers can use on their travels. Within the section, there is an interactive computer kiosk where customers can research, plan, and even book a trip in the store. On the kiosk, there is a "Borders Featured Destination" highlighting various U.S. and international locations and customers can use the feature to learn everything about the locale they plan to visit, including Frommer’s favorite experiences and upcoming events. For featured destinations, Borders also makes available on the kiosk an article written by travel expert Pauline Frommer who offers additional advice and tips for planning a trip to the destination.

In addition, the kiosk within the Travel Destination also features a "Borders Trip Recommender," teamed with Whatsonwhen and Frommer’s, to provide customers with a list of suggested travel destinations based on preferences and criteria set by the shopper using a brief questionnaire regarding the type of trip desired and other parameters. The "Borders Trip Recommender" suggests potential destinations, and by clicking on recommended locations, customers will access related book, DVD and other resources selected by Borders’ expert buyers to enrich the travel experience. Using the "Search and Book" feature on the kiosk from Sidestep.com, recently acquired by Kayak.com, customers can even book an entire trip online from the in-store kiosk. Within the Travel Destination, the new concept store also offers customers travel programming on a large LCD screen that features a mix of travel tips, guided visual tours, author interviews, and nature programming from locations around the world.

Similar deep selection and various interactive opportunities are available in the Cooking and Wellness Destinations, where customers can watch topical programming on the large in-section LCD screens and use the computer kiosks to learn about recommended titles and receive advice from the experts. In the Graphic Novels Destination, there is an amazing selection of titles as well as related gift items and even software that customers can purchase to create their own comic books.

In Children’s—the largest destination with over 9,000 book titles as well as music CDs, DVDs, toys, games and puzzles—kids and their families will be impressed that Borders has divided the section into sub-categories including infants/toddlers/preschoolers, beginning readers (age 4-8), and early readers (age 7-9), which cater specifically to the very different interests and developmental levels of those age groups. In addition, in the new concept store, Borders has relocated the independent reader (age 10-12) section from Children’s and given it its own separate area to appeal to older children.

"Overall, customers need to know that there is something you offer as a retailer that they cannot find anywhere else," Jones said. "That’s just what we are doing with these unique destinations within our concept store. We are putting a stake in the ground when it comes to these categories by making the assortment and the experience so interactive and compelling, that customers will bypass competitors to come to us to shop within these key categories as well as the rest of the store."

LongPen

The new Borders concept store in Ann Arbor is the first retail location in the nation to feature a revolutionary new technology called LongPen™. The remote-controlled Long Pen was invented in 2006 by Canadian author Margaret Atwood. LongPen makes it possible for Borders to host book discussions and signings with authors, as well as music events and appearances by celebrities who are not physically present in the store. Video conferencing allows the authors and performers to connect personally with their in-store fans; seeing and speaking with each other in real time as they would in person. Yet, LongPen also allows the authors and performers—who may be at home or at another location—to personalize and autograph their books, CDs and DVDs with an authentic signature for customers in the store. It is made possible using an electronic signing implement used by the authors and performers that sends an Internet signal to another signing implement in the Borders store to precisely duplicate what the author or performer is writing.

Some fear Atwood’s LongPen could end the personal contact between writers and readers. Atwood said at the launch of the device in 2006 that it will enhance the relationship.

"I think of this as a democratizing device," said Atwood, whose appearances draw hundreds of fans willing to stand in long lines for a word and an autograph. "You cannot be in five countries at the same time. But you can be in five countries at the same time with the LongPen." Early uses of the device suggest that fans feel even more connected to Atwood with the use of LongPen.

Borders is a subsidiary of Borders Group, Inc., (NYSE: BGP) a $4.1 billion global retailer of books, music, movies, periodicals and gift and stationery items with over 30,000 employees and more than 1,100 stores worldwide primarily operating under the Borders® and Waldenbooks® brand names. For more information, visit www.bordersgroupinc.com.