Borders' Skirmish

Borders Group (Ann Arbor, Mich.) reported record consolidated annual sales of $3.3 billion for its fiscal year ending Jan. 28, 2001. But while it reported a 14 percent sales increase in its Borders domestic superstores, comp-store sales increase only 2.3 percent.

International sales, from 14 Borders superstores and 31 Books etc. locations, increased 30 percent from a year ago. Comp-store sales from its Waldenbooks operation were down 3.7 percent for the fourth quarter and down 2.9 percent for the year. In his statement, president and ceo Greg Josefowicz promised to continue “strategies launched in the fourth quarter to stabilize Waldenbooks and improve the economics of our online operations.

“Several factors will drive performance this year,” Josefowicz contended optimistically, “including dedication to our strong core business model, commitment to profit improvement in our International operations, preservation of Waldenbooks'ability to help fund company growth and a focus on Title Sleuth, the in-store aspect of our online business.”

Results from the initial six weeks of the first quarter 2001 support Josefowicz's expectations. Comp-store sales at Borders are running at plus 3 percent and Waldenbooks at minus 1 percent, both within the company's first-quarter projections. For the year, the company expects to achieve 3 to 4 percent comp-stores sales growth for 2001 in its domestic Borders stores, and anticipated comp-store sales to be in the range of flat to -1 percent for Waldenbooks.

Josefowicz proclaimed that “as Borders Group moves forward in this year of change, we will continue to focus on making our best-in-class store model even more productive worldwide. At the same time, we will address market realities in other parts of our business and continue to look at all options — including additional partnerships throughout all operations — to better position the company.”

Borders operates 335 Borders domestic superstores, 14 international Borders stores, 31 Books etc. locations, 869 Waldenbooks stores and Borders.com.