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The Honolulu Advertiser
Posted on: Thursday, May 20, 2004

Waldenbooks' local shops may change name

By Andrew Gomes
Advertiser Staff Writer

Giant book retailer Borders Group Inc. may convert some or all of its 11 Waldenbooks stores in Hawai'i to the Borders name.

The Michigan-based owner of Borders Books & Music superstores and the mall-based Waldenbooks chain recently informed several local landlords of a plan to re-brand Waldenbooks stores as Borders Express.

It was unclear yesterday when such a switch might be made or whether other changes to the stores are planned.

A Borders Group spokeswoman in Michigan did not respond to a request for information yesterday, and a Waldenbooks district sales manager in Hawai'i did not return calls yesterday or Tuesday.

The company has not publicly announced the Borders Express change and whether it is something that may be expanded to the roughly 700 other Waldenbooks stores on the Mainland.

Book retailing industry analyst Derek Leckow with Barrington Research in Chicago said re-branding could be a strategy to capitalize on the stronger Borders name.

"It's a question of leveraging the brand," he said. "They're investing more money in the Borders side of (the business), and there's more advertising to get the Borders name out there than they do for Waldenbooks."

But Leckow also noted that the Waldenbooks chain, which is more than 40 years old, has a big consumer following.

For Borders Group, there has been a focus on improving Waldenbooks sales, which help fuel expansion of the roughly 450-store chain of Borders superstores.

In the past few years, Waldenbooks has suffered overall sales declines at stores at least a year old, in part because of competition from new book superstores such as Borders and rival Barnes & Noble.

Borders Group has responded primarily by closing underperforming Waldenbooks stores, but also has noted in financial reports that it has a general "optimization plan" to improve sales.

The book retailer has shuttered about 170 Waldenbooks stores since 2001, and plans to close 30 to 40 more this year, which should weed out most of the remaining money-losing stores, according to company discussions with analysts.

Borders Group also disclosed in a recent presentation to investors that it plans to add new products to mall stores, but did not disclose details.

According to Borders Group, the average Waldenbooks store last year carried 17,800 product titles and generated $1.1 million in sales, or $275 per square foot.

Waldenbooks generated $821 million in sales for Borders Group last year, compared with $2.5 billion in sales from Borders superstores.

Waldenbooks evolved from a Connecticut book rental library that was established in 1933, started selling books in 1948, and in 1981 became the first chain retailing books in all 50 states.

Kmart Corp. acquired Waldenbooks in 1984, a year before Borders opened its second store. Kmart bought Borders in 1992, and in 1995 spun off the two book retailers as a company with its own publicly traded stock.

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.