With total revenue an comp sales down again in the first quarter of 2010, Borders Group's two top executives discussed way to improve the chain's profitability (loss in the quarter was reduced to $64.1 million, from $86.0 million) and its digital strategy, in a conference call last Thursday. CFO Mark Bierley said Borders will look to maximize the profitability of its stores by “aggressively” pursuing lease buyouts of underperforming outlets; it had 680 stores at the end of the first quarter. Borders will also implement new measures to cut shrinkage and explore ways to increase the efficiency of its supply chain, including shipping more product directly to stores, Bierley said.
Interim president Mike Edwards said that by the fourth quarter Borders could be selling as many as 10 e-reading devices. It is taking pre-orders for the Kobo ereader and expects to begin accepting pre-orders for a second device this week, Edwards said. Borders will have a new Apple app by the end of June, and should also launch its e-bookstore that month, Edwards added. A bright spot in the first quarter was a 34.7% increase in sales through Borders.com, and Edwards said the company continues to invest in ways to drive more traffic to the site and to make the site more customer friendly. In addition, Borders is looking for a digital executive v-p to move the business forward, Edwards said.
Sales through its domestic stores fell 16.1% in the first quarter with comp sales down 11.4%, although comps in its core area fell 6.8%. The number of transactions declined by 8%, and the average sale per ticket was down 3.6%.
