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Borders Group Holiday Sales Increase By 3.9%; Same-Store Sales Up By 2.4% at Domestic Borders Superstores


WEBWIRE

Ann Arbor, Mich.—Borders Group, Inc. (NYSE: BGP) today reported results from the nine-week holiday period ended Jan. 5, 2008. At $1.1 billion, total consolidated sales from continuing operations were up by 3.9% over the same period last year.

Within domestic Borders superstores, total sales for the period were $755.4 million, which is a 6.5% increase over last year. Comparable store sales in the segment for the period increased by 2.4% as both customer transaction count and average ticket increased. The book category was solid with a 3.4% same-store sales increase. With all Seattle’s Best Coffee cafe conversions completed, same-store sales in the category increased by 16.7% and Gifts and Stationery—driven by Paperchase— increased by 10.0% on a comparable store sales basis. Music declined by 12.9%. Excluding music sales, comparable store sales at domestic Borders superstores increased by 4.3%.

Same-store sales in the Waldenbooks Specialty Retail segment increased by 0.2 % for the period compared to last year. At $192.2 million, total sales within the segment decreased for the period by 15.6% compared to last year due to the closure of 136 under-performing Waldenbooks stores during the past year.

Total International segment sales from continuing operations for the period, at $109.3 million, increased by 36.3% compared to last year. Excluding the impact of foreign currency translation, total segment sales from continuing operations would have increased by 26.9% over the same period last year. Comparable store sales for International increased by 10.8% over the same period last year driven by strong performance in Australia.

“We delivered on our promise to improve comp store sales performance this holiday season compared to last year in all of our business segments,” said Borders Group Chief Executive Officer George Jones. “Through effective use of our now 23.5-million-member Borders Rewards loyalty program, we increased traffic at superstores and continued the positive sales trends experienced during the previous two quarters. Still, the overall holiday shopping environment was intensely promotional and impacted the bottom line more than we anticipated. As a result, we anticipate fourth quarter consolidated operating earnings per share from continuing operations (excluding non-operating charges and discontinued operations) to be flat to down slightly compared to last year’s $1.45 per share (excluding non-operating charges and discontinued operations). Overall, we continue to move forward with confidence in our strategic plan for a turnaround of the company and are encouraged by the progress we are making.”

All comparable store sales results reported compare to the same nine-week holiday period of a year ago.

About Borders Group, Inc.
Headquartered in Ann Arbor, Mich., Borders Group, Inc. is a $4.1 billion global retailer of books, music, movies, periodicals, and gift and stationery items. Through its subsidiaries, Borders Group employs more than 30,000 and operates over 1,100 stores worldwide primarily under the Borders® and Waldenbooks® brand names. Borders superstores carry up to 200,000 titles, and customers enjoy a comfortable shopping experience, as well as a host of popular events and community-centered activities when they visit their local Borders store. For more information about Borders Group, visit www.bordersgroupinc.com.

Safe Harbor Statement
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. One can identify these forward-looking statements by the use of words such as “projects,” “expect,” “estimated,” “look toward,” “going forward,” “continuing,” “planning,” “returning,” “guidance,” “goal,” “will,” “may,” “intend,” “anticipate,” and other words of similar meaning. One can also identify them by the fact that they do not relate strictly to historical or current facts. These statements are likely to address matters such as the company’s future financial performance (including earnings per share growth, EBIT margins and inventory turns, liquidity, same-store sales growth, and anticipated capital expenditures and depreciation and amortization amounts), its strategic plans and expected financing and benefits relating to such plans (including steps to be taken to improve the performance of domestic superstores, the exploration of strategic alternatives with respect to certain international operations, the downsizing of the Waldenbooks Specialty Retail Segment and the development of a proprietary Web site) and its intentions with respect to dividend payments and share repurchases. This release contains discussion of our results on an operating basis, which does not include all adjustments required per U.S. generally accepted accounting principles.

These statements are subject to risks and uncertainties that could cause actual results and plans to differ materially from those included in the company’s forward-looking statements. These risks and uncertainties include, but are not limited to, consumer demand for the company’s products, particularly during the holiday season, which is believed to be related to general economic and geopolitical conditions, competition and other factors; the availability of adequate capital to fund the company’s operations and to carry out its strategic plans; the performance of the company’s information technology systems and the development of improvements to the systems necessary to implement the company’s strategic plan, and, with respect to the exploration of strategic alternatives for certain international operations, the ability to attract interested third parties.

The company’s periodic reports filed from time to time with the Securities and Exchange Commission contain more detailed discussions of these and other risk factors that could cause actual results and plans to differ materially from those included in the forward-looking statements, and those discussions are incorporated herein by reference. The company does not undertake any obligation to update forward-looking statements.



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