Borders Group Inc.'s (BGP) fiscal second-quarter loss widened
sharply on restructuring charges as the bookseller made operational
changes that hurt short-term sales.
The second-largest bookstore chain in the U.S. behind Barnes
& Noble Inc. (BKS) has cut its inventory and capital
expenditures because of weak consumer spending. But Chief Executive
Ron Marshall won't put all the blame on recession, saying he has "a
laundry list" of changes to make, like more promotions and crisper
in-store operations.
Marshall said Tuesday that the most recent period was one of
transition as the company made big changes in reducing space and
inventory, which he said hurt sales in the short-term.
For the quarter ended Aug. 1, the company posted a loss of $45.6
million, or 76 a share, compared with a loss of $9.2 million, or 19
cents a share, a year earlier. The latest results included 55 cents
per share in restructuring and other charges.
Revenue decreased 18% to $624.7 million. Same-store sales at
U.S. Borders superstores decreased 17%, while the figure fell 23%
at the mall-based Waldenbooks segment, which the company has been
shrinking. International sales rose 10% excluding currency
changes.
Gross margin fell to 22.9% from 24%.
Borders shares closed Monday at $3.70. The stock has soared from
its Christmas Eve low of 34 cents but remains 30% below prior-year
levels.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com