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ANN ARBOR, MI-This morning Border Group Inc. reported lower than expected earnings numbers for the third quarter, marking several consecutive quarters of declining earnings. For Q3 the locally-based company posted a $39 million, $0.65 per share loss; with consolidated sales down 12.7% to $595.5 million.

During the investor call, CEO Ron Marshall called the Q3 results “both difficult and disappointing.” Borders is looking to cash in on the Holiday season, funneling significant funds into seasonal marketing.

Year to date the company has experienced a loss from operations of $67.6 million, $1.12 per share. Adjusted EBITDA was a loss of $34.2 million. Comparable store sales declined 12.1% at Borders superstores and 7.2% at Waldenbooks Specialty Retail stores. Comparable store sales at Borders declined by 8.5%; a figure that excludes multimedia.

Earnings in the third quarter 2008 were not much better than the current figures. At the time Borders saw a $39 million loss from operations, with a year-to-date loss of $80 million. Adjusted EBITDA was a loss of $24.9 million.

To improve numbers in Q4, Borders has launched what it believes is the first-ever book retailers in-stock guarantee. Customers will be able to order an item online with free shipping if the item is not in the store. Borders has also increased core book inventory between 4% and 7% over last year’s Q4 figures.

As was announced earlier in the month, Borders is putting forth plans to close 200 Waldenbooks locations. Those closings will likely take place before year end, as the company hopes to begin 2010 with a leaner mall-based arm. Roughly 130 locations will remain open. The stores to be closed are listed here.

“We believe there remains an opportunity to profitably operate a much smaller Waldenbooks segment that complements our core Borders superstore business and continues to serve readers in their communities,” Marshall said at the time. “Through this right-sizing, we will reduce the number of stores with operating losses, reduce our overall rent expense and lease-adjusted leverage and generate cash flow through sales and working capital reductions.”

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