Borders to close 250 stores by 2008
The company says it hasn't decided if its Hawaii outlets will be affected
DETROIT » Book retailer Borders Group Inc. announced a fourth-quarter loss yesterday as it disclosed plans to close about 250 of its Borders Express and Waldenbooks stores and the possible sale of most of its international businesses as part of a restructuring plan.
Borders said it planned to close underperforming stores by 2008, but the company has yet to make any definitive decisions on which locations will be affected, said Holly Stein, public relations specialist for Borders Group.
Stein declined to comment on the profitability of the bookstore chain's holdings in Hawaii.
The company rebranded its Hawaii Waldenbooks stores in 2004 as Borders Express outlets, of which it has seven.
The Ann Arbor-based company said it plans to focus more of its efforts on its domestic Borders superstore business and better tailor those stores to local markets.
It plans to develop a consolidated Borders.com e-commerce Web site and publish exclusive books by celebrities, first-time authors and others under the Borders name.
Borders.com currently takes shoppers to a site partnered with online bookseller Amazon.com, while a Web site for its stores allows shoppers to check inventories and reserve items.
The company expects the new Borders.com, which has been under development since the fall, to launch early next year and be independently profitable in 2009.
Borders is working on a new concept store prototype that will be refined this year and is expected to make its debut in early 2008.
Borders said it will cut the number of its Waldenbooks stores to about 300 by the end of next year from 564 at the end of 2006.
The company reported a loss of $73.6 million, or $1.25 per basic share, for the three months ended Feb. 3 compared with a profit of $119.1 million, or $1.78 per diluted share, in the previous year.
For the full year ended Feb. 3, the company reported a loss of $151.3 million, or $2.44 per basic share, compared with a profit of $101 million, or $1.42 per diluted share, in the previous year.
Borders uses basic per share results when it records a loss and diluted per share results when it sees a profit.
The current quarter's results included $2.86 per share in charges related to goodwill, store closure costs and accelerated depreciation costs related to store remodeling.
Excluding the charges, earnings totaled $1.61 per share versus $1.87 per share a year ago.
Analysts polled by Thomson Financial were looking for a profit of $1.63 per share.
Revenue edged up to $1.52 billion from $1.48 billion a year ago. Consensus estimates put sales at $1.48 billion.
Same-store sales, or sales at stores open at least one year, fell 2.8 percent at the company's domestic Borders superstores.
Star-Bulletin reporter Allison Schaefers and the Associated Press contributed to this report.