Let’s get right to the point: it was a lousy second quarter for Borders, as consolidated sales were $856.0 million, down 4.0% over the same period in 2005, and as projected, the company recorded a consolidated loss of $0.29 per share for the period. What’s to blame? Their press release blamed “weakness in bestsellers and cycling against last year’s release of the sixth Harry Potter book.”
Motley Fool’s Stephen Simpson explains things in simpler terms. “I really, really don’t like one-product companies,” he begins, and wonders if Borders’ business model – relying so heavily on the sales of one book – is really viable. “[A]t the end of it all, Borders just isn’t the best bookseller out there. Moreover, book retailing is hardly the best sector of retail. So, here you have what is not-the-best company in what is not-the-best sector in an environment where economic commentators are increasingly worried about consumer spending. Seems to me there are easier ways of making a buck in the market today.” Of course, if anyone finds out what it is, let us all know, will ya?