The Borders Group reported that sales for the first quarter ended April 25, 1999, rose 13.5% to $615.5 million. The gain was led by a 22.2% increase to $409.4 million in the company's superstore division. Sales at Waldenbooks fell 2.7% to $186.5 million, while sales at Borders.com totaled $3.2 million, compared to no revenue in last year's first quarter. Borders indicated that comparable-store sales increased 3.3% at its superstores (4.0% including only prototype stores), but fell 2.3% at Walden.
During the quarter, Borders opened 12 new superstores, bringing the total to 262 stores at the end of the period; at the same time the number of Walden outlets fell from 903 to 886.
The company had a net loss in the quarter of $4.1 million compared to net income of $3.5 million in the same period in fiscal 1999. The loss reflects a $4.3 million loss on Borders.com and a $3.5 million one-time charge related to the resignation of Phil Pfeffer.
According to Borders's proxy statement, the company agreed to pay Pfeffer $2.4 million in severance under his employment agreement and another $1.5 million under a settlement agreement that includes a three-year noncompete and nonsolicitation provision.
With Pfeffer's resignation, Robert DiRomualdo agreed to return full time as president and CEO until a successor is found. Before Pfeffer's departure, DiRomualdo had agreed to an annual salary of $343,333 and a bonus opportunity for the same amount in exchange for approximately 67% of full-time employment.
In unrelated news, Borders.com announced that it signed on to become the exclusive bookseller of About.com (formerly Miningco.com), a broad network of topic-specific, community-oriented sites. "We're extremely selective when it comes to forging online alliance. About.com has surpassed all of our criteria for a productive, long-term affiliation," said Borders Online president Ric Vanzura. The news comes several months after Borders.com and Salon.com, a site somewhat similar to About.com, terminated their relationship.
