Borders loses $74.4 million in Q3

Kris Alingod – AHN News Contributor

Ann Arbor, MI, United States (AHN) – Borders doubled its losses for the third quarter to $74.4 million but is optimistic that changes it made this fiscal year will improve profitability and adapt to the onset of e-readers and digital books.

The Michigan-based company reported Thursday it lost $1.03 per share, nearly twice its losses last year of $37.7 million or $0.63 per share.

Sales plummeted 17.6 percent for the period ended Oct. 30 to $470.9 million from $571.4 million a year ago.

Comparable sales excluding those from new stores decreased 12.6 percent, while website sales fell 8.6 percent.

The numbers “reflect the business challenges facing Borders and the industry at large,” chief executive Mike Edwards said in a statement.

“We’re pleased that our publishers and strategic partners have continued to support our business and brand initiatives. We have a comprehensive, executable plan in place that supports our goal of transforming the iconic Borders brand into a profitable economic model over time,” Edwards added.

Borders just redesigned its website as part of its investment in the new direction the industry is taking. It bolstered its share of the digital book market with newly opened e-digital shops in stores but the changes also caused some disruption and affected sales.

The bookseller expanded its childrens section in more than four dozen locations to continue growth in its Kids Toys and Games category, which has performed better than other businesses. A rewards program has generated $11 million in membership revenue since its launch in September.

The changes are part of a plan drafted from consumer research conducted by the Boston Consulting Group.

“During Q4 and throughout 2011, we will continue to work with strategic partners to provide a compelling combination of book and non book product and service offerings,” Edwards said.

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