Books Bright Spot at Gloomy Borders
by Staff, PW Daily -- Publishers Weekly, 11/16/2005
Borders Group had a rough third quarter with total sales up only 0.5%, to $837.2 million, while the net loss increased to $14.1 million from $1.1 million. The good news for publishers, however, is that books performed well in the period with comparable book sales up 3% at the company's superstores. "The trend for books continues to be good," said Borders CFO Ed Wilhelm. Music continued to be the black hole for Borders with same store music sales down 15% in the quarter, resulting in a 0.2% decline in overall comp store sale performance at the superstores.
Book sales were driven by solid backlist sales and a broad selection of new releases, which helped to offset lower sales of bestsellers, said Wilhelm. Among the titles that did well in the third quarter were The March, The Historian and The Year of Magical Thinking as well as several mystery titles. Wilhelm said title selection for the holiday season looks stronger than last year. In addition to the top sellers in the third quareter continuing to do well over the holiday, other books that should be strong sellers include Doris Kearns Goodwin's Team of Rivals and the new James Patterson, Mary Mary.
To help get people into its stores over the holidays, Borders has begun an advertising campaign in The New Yorker and will soon launch a national radio promotion that will have has its centerpiece advertising on National Public Radio. The company also plans to send regular e-mail updates to its customer base. No repeat of Borders' cable advertising campaign of 2004, however, is planned for this year. The company does plan to open nine new superstores in the period.
In a further review of the third quarter, sales at the Waldenbooks specialty retail segment fell 8.1%, to $138.4 million with comp store sales down 5.2%. The company's international stores also struggled in the third quarter. Although total sales rose 6.2%, to $125.9 million, the loss increased to $10.4 million, up from $2.5 million. Sales were particularly weak in the U.K., which accounts for 75% of Borders' international business. Comp store sales at its U.K. superstores fell 5% and were down 10% at Books etc. Wilhelm said that while the U.K. operation was facing easier comparisons in the fourth quarter, he wasn't expecting as big bounce in business over the holidays.|
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