Borders released its financial information for the quarter ended November 1st after the close on Tuesday, and its sales drop was the worst of major book chains reporting this quarter. Sales at Borders superstores dropped 12.8% vs. the same store a year ago, or 10.6% with music excluded. For those of you keeping score at home, here are the same store sales declines of the three largest book chains for the most recent quarter:
Barnes & Noble -- 7.4% decline
Waldenbooks -- 7.7% decline
Books-a-Million -- 9.9% decline
Borders -- 12.8% decline
As was the case at other major chains (see “Chain Bookstore Slide Continuing”), major declines in store traffic beginning in September were the cause of the sales woes.
Borders also lost money: $172 million in the third quarter, up from $40 million a year ago, primarily due to deferred tax and fixed asset impairments.
Compounding the pain for publishers, Borders also slashed its inventory by $304.2 million from the year ago period. That’s a big increase from the $181.7 million inventory reduction at the end of the last quarter, or the $133 million inventory reduction at the end of the quarter before that.
Sales through Borders.com did not meet expectations, with the division now deemed unlikely to go black this year.
Borders had the right to force a sale of its Paperchase business to Pershing Square Capital Management in January, but with a sale of the company now off the table, Borders is exploring an “alternative financing transaction” with