Borders Group reported a $45.6 million loss from continuing operations in its second quarter (ending August 1) on sales down nearly 18%.  Borders same store sales were down 17.9%; Waldenbooks sales were down 10.8%; total consolidated sales were $616.8 million, down 17.7%.  A big chunk of the losses came from various adjustments, many related to the company’s restructuring.

Borders CEO Ron Marshall attributed the tough quarter to the costs of reducing inventory in Borders’ weak categories (CDs and DVDs among them) and increasing inventory and emphasis in stronger categories (e.g., its additions of toys and games in the kids department, see “Borders Adds Toys and Games”).

The sales decline was worse on a year over year basis than it was in Q1 (see “Sales Decline 12% at Borders”).   Barnes & Noble sales were also down by a greater percentage in Q2 than in Q1, although at much lower percentages (see “Barnes & Noble Sales Slip 5%”).

The amount of inventory reduction, $208 million, vs. the year ago period was roughly consistent with where it was at the end of Q1.