Borders Group Inc, the unprofitable bookstore chain that tried to sell itself last year, said fourth-quarter profit fell as consumers pared spending on books, according to Bloomberg.
Net income dropped 54 per cent to $29.6 million, or 49 cents a share, the Ann Arbor, Michigan-based company said. Total revenue decreased 14 per cent to $1.09 billion.
Declining home values and the highest unemployment in more than a quarter century have caused consumers to spend less on books, leading Borders to post its 11th straight sales decline. Chief Executive Officer Ron Marshall announced a plan to trim employees after vowing to “aggressively” reduce expenses when he took over from George Jones in January.
“Our top priority is getting our financial house in order by continuing to reduce expenses, pay down debt and improve cash flow,” Marshall said in the release. The company projects negative sales trends through the rest of the year and is planning only “minimal” capital expenditures, Marshall said.
Sales at stores open at least a year will be “significantly” lower for the first quarter and first half of the year, Marshall said in a telephone interview. Borders said on March 5 that it would eliminate 742 positions in its more than 900 stores, about 3 per cent of its workforce, to align expenses with declining sales.