Ann Arbor, Mich. Borders Group Inc. said its losses narrowed in the first quarter although its same-store sales fell, and Wall Street greeted Tuesday's relaunch of the bookseller's retail Web site with a sell-off of its shares.
Borders Group said it lost $31.7 million in the three months ending May 3, compared with a loss of $35.9 million for the comparable period of 2007.
The company said its results were hurt by store-closure costs, severance costs and fees related to strategic alternatives.
George Jones, Borders CEO, told the Associated Press that a restructuring announced last year is expected to save $120 million a year and already has significantly improved Borders' cash flow. He said the cuts and the launch of the Web sales site will pay off in months to come.
"You're going to see an interplay of the online world with the bricks-and-mortar world," Jones said.
The company said its revenue fell 0.8% to $792.5 million from $798.7 million. Same-store sales at domestic superstores fell 4.1%.
Borders announced in March that it was putting itself up for sale, and Barnes & Noble said Thursday that it had assembled a management team to study the feasibility of a combination with Borders.
The Borders earnings report came hours after the company relaunched its own e-commerce site, Borders.com. The launch followed seven years of partnership with Amazon.com, during which time the Borders site took shoppers to a site partnered with Amazon. Borders expects its new site to break even this year and to be independently profitable in 2009.