Borders to Focus on Existing Business

Jim Milliot |

Aug 28, 2000

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Borders to Focus on Existing Business Jim Milliot -- 8/28/00 Having rejected an offer to acquire the company earlier this year, the board of directors of Borders Group has decided not to pursue a major stock repurchasing program, although the board retains the authority to spend up to $67 million to purchase stock from time to time. With the sale of the company and stock repurchase shelved, the search for strategic options to boost the company's stock price that had been led by Merrill Lynch (News, Mar. 29, 1999) has been put on the back burner. According to Borders's president Greg Josefowicz, "The best way that the company can now serve its shareholders' interests is to continue to strive to improve our operations and deliver excellent results." Although its stock price continues to languish in the low teens, Borders was no doubt encouraged to move ahead with its strategy of retail convergence by solid second-quarter results for the period ended July 23, 2000. Total revenues for the company rose 10.9%, to $699.7 million, and the net loss was trimmed to $1.6 million from $2.6 million in the comparable period in fiscal 2000. Revenues from its store operations increased 10.6%, to $694.6 million, while revenues at Borders. com rose 55%, to $5.1 million. The store group produced pretax income of $4.1 million that was offset by an operating loss of $6.7 million at Borders. com. The company's best performer in the quarter was its superstores, where revenues increased 14%, to $462.2 million, and net income jumped 117%, to $10.2 million. Comparable store sales were up 3.6% and nine new outlets were opened. Sales at Waldenbooks increased 0.7%, to $187.5 million, and the chain had a net loss of $1.3 million. Same-store sales were up 0.4%, and Walden had a net gain of four stores in the quarter to end the period with 891 outlets. The international group had a sales increase of 25%, to $44.8 million, and a net loss of $3.9 million. For the first six months of the year, total revenues rose 10.5%, to $1.38 billion, and the net loss was cut to $2.5 million from $3.3 million.

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Borders to Focus on Existing Business
Jim Milliot -- 8/28/00

Having rejected an offer to acquire the company earlier this year, the board of directors of Borders Group has decided not to pursue a major stock repurchasing program, although the board retains the authority to spend up to $67 million to purchase stock from time to time. With the sale of the company and stock repurchase shelved, the search for strategic options to boost the company's stock price that had been led by Merrill Lynch (News, Mar. 29, 1999) has been put on the back burner. According to Borders's president Greg Josefowicz, "The best way that the company can now serve its shareholders' interests is to continue to strive to improve our operations and deliver excellent results."

Although its stock price continues to languish in the low teens, Borders was no doubt encouraged to move ahead with its strategy of retail convergence by solid second-quarter results for the period ended July 23, 2000. Total revenues for the company rose 10.9%, to $699.7 million, and the net loss was trimmed to $1.6 million from $2.6 million in the comparable period in fiscal 2000. Revenues from its store operations increased 10.6%, to $694.6 million, while revenues at Borders. com rose 55%, to $5.1 million. The store group produced pretax income of $4.1 million that was offset by an operating loss of $6.7 million at Borders. com.

The company's best performer in the quarter was its superstores, where revenues increased 14%, to $462.2 million, and net income jumped 117%, to $10.2 million. Comparable store sales were up 3.6% and nine new outlets were opened. Sales at Waldenbooks increased 0.7%, to $187.5 million, and the chain had a net loss of $1.3 million. Same-store sales were up 0.4%, and Walden had a net gain of four stores in the quarter to end the period with 891 outlets. The international group had a sales increase of 25%, to $44.8 million, and a net loss of $3.9 million.

For the first six months of the year, total revenues rose 10.5%, to $1.38 billion, and the net loss was cut to $2.5 million from $3.3 million.

A version of this article appeared in the 08/28/2000 issue of Publishers Weekly under the headline: