Borders Loss Widens Dramatically On Charges

Borders has struggled for years as shoppers turn to online and discount retailers for books. The problem worsened in the recession as consumers cut back on buying discretionary items like books and music.

Sales at stores open at least a year, considered a key indicator of a retailer's financial health, fell 13.5 percent at Borders superstores and 5.5 percent at Waldenbooks for the quarter.

In the past year, the company slashed jobs, brought in a new CEO and closed stores to buoy itself.

Borders CEO Ron Marshall on Tuesday highlighted the company's lower costs, improved cash flow and debt position, which was down 45 percent, as a result of its aggressive controls. But he said there were still improvements to be made in sales.

"Make no mistake about it, we have much more work to do and will continue to maintain our financial discipline," Marshall said in a statement. "At the same time, we know that we cannot save our way to prosperity. Our long-term success will come from doing a much better job of driving sales, and that's where our focus is right now."

The company will hold a conference call Wednesday to discuss the results.