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Borders Loss Widens, To Diversify Merchandise

Borders reported a slightly larger loss in the second quarter on lower revenue and said it will add more items besides books in its stores to boost revenue.

Oliver Quillia for cnbc.com

Since financier Bennett LeBow invested $25 million in the company in May and became CEO, the second-largest traditional U.S. book seller has made a variety of moves to shore up its struggling business, including selling its Paperchase stationery unit and introducing an electronic bookstore.

Still, the company faces tough competition from online retailers such as Amazon and discount stores like Walmart . Borders said Wednesday its quarterly loss totaled $46.7 million, or 67 cents per share. That compares with a loss of $45.6 million, or 76 cents per share, last year.

Revenue fell 12 percent to $526.1 million from $594.2 million.

Revenue in stores open at least one year fell 6.8 percent. Revenue at stores open at least a year is a key indicator of a retailer's performance because it excludes growth at stores that open or close during the year.

Borders is focusing on its children's department and selection of electronic-book readers to offset tough competition from online retailers and discount stores.

In the children's department, it is expanding its assortment of educational toys and games and will start to sell Build-A-Bear craft kits.

The company lowered its Kobo electronic book reader price by $20 to $129.99 and will also offer the Aluratek Libre eBook Reader Pro for $99.

Border's chief rival Barnes & Noble last week also said its first-quarter loss widened, partly because of costs related to a lawsuit and proxy contest with billionaire investor Ron Burkle, who has criticized the way the company is being run.

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