Borders Group says it lost money for the third straight quarter as sales at its bookstores continued to decline, but the loss was smaller than a year ago.
Brick-and-mortar book retailers have faced increased competition from discounters and online retailers who have significantly lowered their prices to snag more business. The recession has compounded the problem, with shoppers limiting spending on discretionary items like books.
Borders has cut jobs, closed stores and put new leadership in place to cope with the challenges. It unsuccessfully explored the possible sale of the company more than a year ago but did sell some business segments.
Borders lost $38.5 million, or 64 cents per share, in the third quarter. That compares with a loss of $172.2 million, or $2.85 per share, during the same period a year earlier.
Revenue for the three months ended Oct. 31 dropped 13 percent to $602.5 million. Sales at Borders superstores open at least a year fell 12.1 percent, while sales at Waldenbooks stores open at least a year slipped 7.2 percent. This figure is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.
Borders, one of the nation's largest booksellers, has been trying to turn around its business for some time. The bookseller continued its efforts during the quarter, trimming inventory by $99.1 million and lowering its selling, general and administrative expenses by $27.1 million. Total debt was $375 million at quarter's end, a reduction of $112 million.
The company based in Ann Arbor, Mich. has also shifted its focus away from fading and less profitable categories like music and tried to expand in areas such as children's books, toys, stationery and its cafe.
Borders is making a strong push for holiday business this year, boosting its core book inventories and using various in-store promotions to drive shoppers to its locations. It has also started an in-stock guarantee, whereby customers will get free shipping of the book to their home if the book is not in stock at a store.
The bookseller announced earlier this month that it plans to close about 200 of its Waldenbooks stores in January as part of its strategy to have a smaller, more profitable mall business.
Borders runs approximately 1,000 stores worldwide mostly under the Borders and Waldenbooks brands.