Full Description

Borders Group, Inc., through its subsidiaries, operates book, music and movie superstores, and mall-based bookstores. The Company's operating subsidiaries include Borders, Inc. (Borders), Walden Book Company, Inc. (Waldenbooks) and Borders Australia Pty Limited. The Company’s operates in three segments: Borders Superstores, Waldenbooks Specialty Retail stores and International stores. At January 31, 2009, it operated 518 superstores under the Borders name, including 515 in the United States and three in Puerto Rico. The Company also operated 386 mall-based and other small format bookstores, including stores operated under the Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores. On June 10, 2008, the Company sold all of the outstanding shares of Borders Australia Pty Limited, Borders New Zealand Limited and Borders Pte. Ltd. to companies affiliated with A&R Whitcoulls Group Holdings Pty Limited.

Borders Group, Inc. owned and operated United Kingdom-based Paperchase Products Limited (Paperchase), a designer and retailer of stationery, cards and gifts. As of January 31, 2009, Paperchase operated 117 stores, primarily in the United Kingdom, and Paperchase shops have been added to 333 Borders superstores. In addition, the Company operated an e-commerce Website, www.Borders.com, which was launched in May 2008.

Borders Superstores

Borders is an operator of book, music and movie superstores in the United States. Borders superstores offer customers an assortment of books, music and movies, gifts and stationery. Borders superstores carry an average of 80,000 book titles, with individual store selections ranging from 39,000 titles to 120,000 titles, across numerous categories. As of January 31, 2009, the majority of the domestic Borders superstores were in a book, music and movie format.

Borders superstores average 24,700 square feet in size, including approximately 13,100 square feet devoted to books, 2,600 square feet devoted to music, 800 square feet devoted to newsstand and 900 square feet devoted to movies. The typical Borders superstore also dedicates approximately 1000 square feet to gifts and stationery. In addition, Borders Group, Inc. devotes approximately 1,400 square feet to a cafe within all Borders superstores. The Company has a licensing agreement with Seattle’s Best Coffee, a wholly owned subsidiary of Starbucks Corporation, through which it operates Seattle’s Best Coffee-branded cafes within all of its existing Borders superstores in the continental United States and Alaska and new stores as they are opened.

Waldenbooks Specialty Retail Stores

Waldenbooks Specialty Retail operates small format stores in malls, airports and outlet malls, offering customers a source for new releases, hardcover and paperback bestsellers, periodicals and a standard selection of other titles. Waldenbooks Specialty Retail operates stores under the Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores and its mall-based seasonal businesses. Waldenbooks Specialty Retail stores average approximately 3,700 square feet in size, and carry an average of 13,500 titles, ranging from 5,500 in an airport store 18,000 in a large format store.

International Stores

Borders Group, Inc.’s International stores include three Borders superstores in Puerto Rico and its Paperchase United Kingdom business. Paperchase is engaged in stationery retailing in the United Kingdom. As of January 31, 2009, the Company operated 117 Paperchase locations, including 41 stand-alone stores, 69 concessions in the stores of other retailers, and seven stores located in railway stations. The vast majority of Paperchase’s merchandise is developed specifically by and for Paperchase. During the fiscal year ended January 31, 2009 (fiscal 2008), the Company purchased the remaining 3% of shares in Paperchase, bringing its ownership interest in Paperchase to 100% as of January 31, 2009. On June 10, 2008, the Company sold all of its bookstores in Australia, New Zealand and Singapore.