Borders to Close About 200 Waldenbooks Stores

(Updates with details on size of work force and type of jobs being cut, updates stock price)

Borders Group Inc. (BGP) said it will close more than half of its remaining mall-based Waldenbooks stores in January, cutting its work force by 6%, as part of the company's long-term turnaround strategy as Borders looks to create a smaller, profitable segment.

The second-largest bookstore chain in the U.S. behind Barnes & Noble Inc. (BKS) has for years been closing underperforming Waldenbooks locations as part of a turnaround strategy. The company shuttered 112 of the locations last year and closed an average of 66 in the seven prior years.

There will be 200 Waldenbooks closures in the latest round, leaving about 130 stores. Some 1,500 of Borders' 25,000 employees will be let go, 75% of them part-timers.

Borders has cut its inventory and capital expenditures because of weak consumer spending. The company has already initiated at least two rounds of job cuts this year--trimming 136 corporate jobs, or about 12% of the corporate work force, in February and 742 store management jobs, or less than 3% of that group, in March.

The stores that will remain open will be integrated into the Borders superstore computer system, as Borders merges all stores into a single platform.

The stock rose 2 cents after-hours to $2.13. The stock is up from its all-time low of 34 cents set last December, but is far off the 1998 high of nearly $40.

-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com

(END) Dow Jones Newswires

11-05-09 1751ET