NEW YORK (AP) — Cutting costs helped Borders Group Inc. narrow its fiscal first-quarter loss even as its revenue fell 16 percent, the second-largest traditional U.S. book seller said Thursday.
The company, based in Ann Arbor, Mich., lost $64.1 million, or $1.07 per share, for the period that ended May 1, compared with a loss of $86 million, or $1.44 per share, a year earlier.
Revenue fell 16 percent to $547.2 million from $650.2 million.
Borders has struggled to cope with tough competition from discount stores and online retailers.
Last week it received a $25 million capital infusion from financier Bennett LeBow, who will become its chairman and biggest shareholder with a 15.5 percent stake now and possibly 35 percent of Borders’ outstanding stock based on warrants.
Mike Edwards, the company’s interim president and chief executive officer, said in a statement Thursday that LeBow’s investment allows the company to execute its strategic plan, including returning to profitability and expanding its Web site.
CFO Mark Bierley said in an interview with The Associated Press that Borders’ kids business was strong during the quarter and the company’s cafe business improved, helped by offering free wireless connections.
As interest builds in electronic books, Borders said it was on track to start selling a Borders-branded Kobo e-reader and other e-reading devices in a section of its stores to be called “Area E,” beginning in August.
Borders has closed 214 bookstores since last year’s first quarter, and its inventory fell 6 percent to $836.2 million.
In a call with analysts, Bierley said the company plans to try buying out the remaining lease periods at underperforming stores.
“The buyouts would, based on our assumptions, positively impact our long-term bottom line,” Bierley said.
Bierley also said the company plans to reduce what’s known as shrinkage — the loss of inventory due to worker error, accounting mistakes and theft — in stores where it’s been highest.
Revenue in the book seller’s international segment, which includes Paperchase stores and its franchise business, rose nearly 4 percent to $22.4 million.
Domestic sales fell 16 percent to $520 million.
Revenue in stores open at least a year fell 11.4 percent. That’s a key measure of a retailer’s performance because it excludes the impacts of expansion and stores closing.
The overall number of transaction was flat compared to last year but the average amount customers spent per visit dropped 3.6 percent.
Shares slipped 11 cents, or 4.8 percent, to $2.18 during morning trading. The stock has traded between 85 cents and $4.48 during the past year.