Breaking with tradition -- and its competitors -- Borders's (BGP) newest earnings report expands the definition of its holiday season to extend from November 1 to January 16. But the extra two weeks can't hide yet more dismal news. The bookstore chain's sales for the 11-week period were $649.2 million: a 14.7% drop from last year. Comparable store sales dropped 14.6%. The news improves a little bit, once the bottomed-out multimedia and DVD market is taken into account -- with "only" a 10.9% drop.Borders also tries to spin grim news about its Waldenbooks arm, which will close more than 180 stores by the end of January. Sales for the holiday period were $153.2 million, a 14.6% decrease -- but just 9.4% for its stores that will remain open.
"We are disappointed with holiday results and must intensify our focus on creating and delivering a shopping experience that drives profitable sales," said Borders Group C.E.O. Ron Marshall in the accompanying statement. "Given the sales challenge, we have continued to manage cash flow and have taken several important steps in line with our strategic priorities, including moving away from underperforming, low margin categories such as music and video in favor of better performing categories such as children's."
Marshall tries to find silver linings in Borders's new digital partnerships with Kobo and Spring Design, getting out of the DVD business, and expanding its Borders Rewards program. But even compared to the shaky holiday reports issued by Barnes & Noble (BKS) and Books-A-Million (BAMM), Borders comes off looking like a retailer in serious trouble -- something that all the past year's personnel changes and new initiatives may be too late to fix.
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