• Skip to main content
  • Skip to primary sidebar
  • Login
  • Register

Publishers Lunch

The Publishing Industry's Daily Essential Read

  • Publishers Marketplace
  • Site Guide
  • Help

Borders Comps Plunge; Pershing May Lend More

November 26, 2008
By Michael Cader

Borders has confirmed the obvious: “management is no longer contemplating a transaction” to sell the entire company.” But it is “in discussions with Pershing Square regarding an alternative financing transaction,” and still has the right to sell the Paperchase chain to Pershing Square for $65 million.

Same-store sales for the third quarter suffered more at Borders than at the other big chains, falling 12.8 percent at their superstores, which had $548.4 million sales, with Waldenbooks comps falling less, by 7.7 percent, for sales of $91.5 million in total. Their web site sales were $11.9 million, “which is below management expectations due to the challenging sales environment. They no longer expect Borders.com to break even this year “as previously stated.”

Their consolidated loss was bigger than analysts were expecting, a deficit of $38.4 million or .65 a share, about the same as a year ago (analysts were anticipating only .50 a share; and total sales of $693.4 million were well below estimates of $726.5 million). The company also took a non-cash non-operating charge of $133.2 million, “consisting primarily of deferred tax and fixed asset impairments.”

But the company continues to reduce their debt, standing at $525.4 million at the end the quarter, down from $798.5 million this time a year ago. Inventory was down by $304 million at cost, or 19.5 percent compared to a year ago. And the company says “operating cash flow from continuing operations improved by $110.0 million, as the company recorded fiscal year-to-date cash flow of $9.4 million compared to cash use of $100.6 million for the same period in 2007.” 

They also report they have reduced expenses more than expected, saying they are “on-track to reduce fiscal 2009 operating expenses by $140 million compared to its previous target of $120 million. As a result, the company expects to save $70 million this year versus its original $60 million target for 2008. Beyond these operating expense improvements, the company believes there is additional opportunity to improve its realized gross margin through a more effective use of promotions and discounts.”

Filed Under: Booksellers, Earnings Reports, Free

sidebar

Primary Free Sidebar

Login


Forgot password
Quick Pass users click here to log in
Get Full Access
The publishing industry's essential daily read

Each Publishers Lunch Deluxe subscription includes full access to our searchable multi-year archive of industry news, a nightly email reporting 10 to 50 deal transactions, and our database of industry contacts, scripts, and posting privileges.

Learn More

RSS Automat

  • Dublin Literary Award Shortlist Announced March 30, 2023 Prize site
  • Leigh Bardugo Signs with WME for Film/TV Representation March 29, 2023 Variety
  • Solid State Books Workers Announce Plans to Unionize March 28, 2023 Union website
  • Following Sale, America's Test Kitchen Lays Off 23 Employees, Including All of ATK Kids Staff March 28, 2023 Union instagram post
  • Acquire and Fire: Hachette UK In Consultations to Eliminate About Half the Staff of Welbeck March 28, 2023 Bookseller
  • Jefferson, de Kretser Win Folio Prizes March 27, 2023 Prize announcement
  • Harper UK Edits Agatha Christie Novels to Remove "Offensive" Language March 27, 2023 The Guardian
  • NYU Launches Five-Day "Advanced Publishing Institute" Program for January 2024 March 25, 2023 NYU site
  • Hachette UK to Publish "Spare Us!" Parody on April 6 March 23, 2023 Publisher site
  • Netflix to Stream Series Based on Ramit Sethi's Book, "How to Get Rich" March 23, 2023 THR
© 2023 Publishers Lunch. All Rights Reserved.