Music Sales Hurt Borders

ANN ARBOR, MI-Book-chain Borders Group reported a $39.1-million loss during its third quarter, while same-store sales dropped 0.7% at its 487 domestic superstores. The company was hurt by weak music sales and a continued deterioration of its mall-based Waldenbooks chain, executives said during the company’s quarterly conference call.

Music, which accounts for 10% of total sales in Borders’ superstores, was down 18% on a year over year basis during the quarter, which ended Oct. 28. The company is looking at alternatives to strengthen sales in the category such as making the departments more “visually stimulating” and exploring in-store downloading, says George Jones, the company’s CEO. “CDs are going to be a continuing down trend,” he says. “It’s not going to go away.”

Meanwhile, same-store sales dropped 5% at Borders’ 652 Waldenbooks units, which posted a net loss of $8.4 million. Borders has closed 40 to 50 Walden stores a year, and plans to shut at least 80 next year. A number of Walden leases will be up in January, so that could give executives the opportunity to close even more of those locations.