Borders Branches Out In Asia, U.k.

NEW YORK--Borders Group, architect of the books-and-music superstore concept in the U.S., is taking it overseas for the first time with a planned opening in Asia and an acquisition in the U.K.
On Nov. 1, the Ann Arbor, Mich.-based retailer expects to open its first location outside the U.S., a superstore in Singapore that will feature more than 200,000 book and music titles.
The company also announced that it is acquiring a 22-store, London-based book chain called Books, etc. for an undisclosed price (Billboard Bulletin, Sept. 30).
At present, Books, etc. stocks mostly books and magazines, but Borders Group VP of planning and finance Rick Vanzura says, 'We plan on opening superstores ultimately similar to the U.S. format.'
The typical Borders Books & Music in the U.S. is a 27,000-square-foot superstore, with 8,500 square feet devoted to music and about 400 square feet given over to video, according to the company's financial statements. Each superstore carries on average 50,000 SKUs of music and about 9,300 of video. Average annual sales per store are $7.2 million.
The retailer operates 184 superstores in the U.S., of which 168 sell music as well as books. The company also owns three Planet Music superstores, but Borders has said that the music retailer, whose store count is down from nine, is no longer a growth vehicle. Borders also owns about 1,100 Waldenbooks stores in U.S. malls.
In its financial statements, Borders says it intends to open at least 40 superstores this year.
After the closing of the deal--expected by Oct. 20--Books, etc. will be 100% owned by Borders Group and a new subsidiary, BGI U.K. Richard Joseph, currently president/CEO of Books, etc., will continue to head the chain along with his management team.
According to published reports in the U.K., Books, etc., which was founded in 1931, had been planning a public offering of stock until Borders came up with a more attractive financing deal that included a nationwide expansion plan. Such a rollout would be a threat to established U.K. book chains W H Smith and Dillons.
In the second fiscal quarter, which ended July 27, Borders reported net income of $500,000 on a 12.6% increase in sales to $466.3 million. In the same period last year, the company lost $2.2 million. Its shares closed at $27.50 in New York Stock Exchange trading at press time; its 52-week high is $29.625.

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