Borders, the Ann Arbor-based bookseller, has failed to turn around a poor 2010 with revenue falling 17.6 percent in the third quarter, to $470.9 million. The loss from continuing operations was $74.4 million compared to a loss of $37.7 million a year ago.
The losses impacted the share price, with the chain losing $1.03 a share in the three months up to the end of October. Sales on Borders.com fell 8.6% to $12.5 million in the third quarter. It reduced its inventory by $233.7 million in the quarter. But it signed up more than 580,000 customers for its rewards plus program, bringing in $11 million in revenue.
Borders Group President Mike Edwards said during a conference call with analysts that a new strategic plan had not been in place long enough to improve results.
"We have a comprehensive, executable plan in place that supports our goal of transforming the iconic Borders brand into a profitable economic model over time," Edwards said on the call.
Borders faces a number of challenges ongoing challenges. It is competing directly as a walk in store with store giants like Walmart and Barnes & Noble, and online against the likes of Amazon.
"With Google, Amazon and Walmart, you have three 800-pound gorillas in the room. And you are a 98-pound competitor," Dalto said of Borders.
"If you go four years with all these losses, the core of your strategy is not working," Dalto said. "It is faulty. This just shows it."
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