UPDATE 2-Borders posts smaller quarterly loss

* Q1 net loss per share $1.07 vs loss of $1.44 last yr

* Total rev falls to $547.2 mln from $650.2 mln

* Domestic same-store sales fell 11.4 pct in Q1

* Shares up 2.6 percent
(Adds CEO comment, details, background, stock action)

DETROIT, May 27 (BestGrowthStock) – Borders Group Inc (BGP.N: )
reported a smaller quarterly loss, but sales at the No. 2
specialty U.S. bookseller continued to decline as consumers
shifted to digital media offered by rivals.

The net loss narrowed to $64.1 million, or $1.07 a share,
in the first quarter ended May 1 from $86 million, or $1.44 a
share, a year earlier.

Excluding discontinued operations, the loss was $1.08 a
share.

Revenue fell to $547.2 million from $650.2 million.
Same-store sales in the company’s domestic business, which
includes its bookstores and Borders.com, fell 11.4 percent.

Borders last week received a $25 million investment from
financier Bennett LeBow in exchange for a 15.5 percent stake,
allowing him to overtake investor Bill Ackman’s Pershing Square
Capital Management as the bookseller’s largest shareholder.
[ID:nN21162548]

“Our top line remained challenged during the first quarter,
yet we were able to soften the impact on our bottom line
through continued cost controls,” Borders interim Chief
Executive Officer Mike Edwards said in a statement.

Borders is set to launch its own electronic bookstore in
June in the hopes of catching up to Barnes & Noble Inc (BKS.N: )
and other rivals to win some of the fast-growing market for
e-books.

Edwards also said the company was preparing to launch
e-book mobile applications and remained on track to introduce
in August its “Area-e” digital shops, which are dedicated
sections within its stores to promote its e-book business.

Borders closed six domestic bookstores during the quarter,
ending the period with 680.

Shares of Borders were up 2.6 percent at $2.35 in premarket
trading.

Stock Market Trading

(Reporting by Ben Klayman in Detroit; additional reporting by
Phil Wahba in New York, editing by Gerald E. McCormick and Lisa
Von Ahn)

UPDATE 2-Borders posts smaller quarterly loss