WEDNESDAY NOVEMBER 26
Borders Off the Block
Borders Group Inc. took itself off the market Tuesday as it reported lower sales and profits. The Ann Arbor-based bookseller may still sell its Paperchase Products unit to Pershing Square Capital Management LP for $65 million, the company said. Borders CEO George Jones said the company went through a long and thorough process in exploring a sale, but that it was in the best interest of the company not to sell.
November 2008
"It's been quite a distraction on the organization. We are really glad to get to this point," Jones said. "We looked at all the alternatives. We feel ready to weather the economic storm that all retailers are in."
Borders reported a 9.4% drop in third-quarter revenue and said its e-commerce site would not break even this year as previously stated.
The company reported a net loss of $175.4 million, deeper than a $161.1-million loss in the same quarter a year ago. Excluding nonoperating charges of $133.2 million, Borders had a $39-million loss, or 64 cents a share, compared with $42 million, or 65 cents a share, in the third quarter of 2007.
Its debt was at $524.4 million at the end of the third quarter, compared with debt of $798.5 million in the same period a year ago.
Borders also reduced inventories by $304.2 million, or 19.5% in the quarter compared with the third quarter of 2007.
And management plans to reduce 2009 operating expenses by $140 million, up from the $120-million reduction previously announced. And it expects $70 million in savings this year.
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