Report: Borders Off Selling Block
Ann Arbor, Mich. Borders Group Inc. on Tuesday reported a widening loss for the third quarter and said it is no longer for sale, according to the Associated Press. It may still sell its Paperchase Products Ltd. stationery business to Pershing Square Capital Management LP for $65 million but the company also is discussing alternative financing with Pershing, the report said.
Borders reported a net loss of $175.4 million, compared with $161.1 million in the same quarter of last year.
Revenue dropped to $693.4 million, from $765.2 million in the same quarter last year. Same-store sales dropped 12.8% at the company’s Borders Superstores and 7.7% at its Waldenbooks stores.
"Borders has successfully reduced debt, improved operating cash flow, lowered expenses, improved gross margin-excluding occupancy-and improved inventory productivity during a time of extreme economic challenge," said Borders Group CEO George Jones in a statement. "We stated at the beginning of this year that strengthening our balance sheet is our top priority and we are delivering results. We'll remain keenly focused on these critical initiatives, and in addition, will increase our efforts to drive further gross-margin improvement. All of the changes we are making will position Borders Group to compete more effectively."
The bookseller has been in the midst of a turnaround for more than a year, during which it weighed the possible sale of its core business. But company executives said Tuesday that the progress made during that time will allow the company to stand on its own, even in the middle of an economic meltdown.
"We have smiles on our faces," George Jones, CEO of Borders said of the decision to take Borders off the block, the Associated Press reported.