Borders Group Revises Q1 Sales and Earnings Guidance.

ANN ARBOR, Mich. -- Borders Group, Inc. (NYSE:BGP) today issued revised sales and earnings guidance for the fiscal first quarter of 2005, which ends April 23. Management now projects a first quarter consolidated per share loss of $0.06 to $0.07 versus previously projected consolidated earnings per share of $0.00 to $0.02. Both projections include the impact of non-operating adjustments.

On a quarter-to-date basis through April 18, comparable stores sales at Borders superstores have declined by 0.8% and by 3.0% at Waldenbooks. Total International segment sales, quarter-to-date, have increased by 22.8%. With less than one week remaining in the period, final first quarter sales results are not expected to change significantly. Management had called for first quarter comparable store sales to increase in the low single digits at Borders superstores, to decline in the low single digits at Waldenbooks, and for total sales in the International segment to increase by 20% to 25%.

"Sales trends in the first quarter have been weak, in particular following the Easter holiday," said Borders Group Chief Executive Officer Greg Josefowicz. "A decline in customer traffic, in large part, drove negative comparable store sales. While bestsellers were down, same-store book sales at Borders quarter-to-date are slightly positive, while same-store music sales have declined in the low double digits. As previously announced, Borders Group is increasing its capital investments in store remodels and new store openings in the U.S. and overseas, among other initiatives. We are committed to continuing these investments because they are essential to our long-term growth, however, this commitment limits our flexibility to offset weak sales with cost controls."

Borders Group management will re-evaluate its full year 2005 outlook and will include updated guidance for the full year, as well as initial guidance for the second quarter, in its next scheduled release.

Next Financial Release/Conference Call

Borders Group will issue final first quarter results after market close May 17 with a conference call to follow May 18 at 8 a.m. Eastern.

About Borders Group

Headquartered in Ann Arbor, Mich., Borders Group is a leading global retailer of books, music and movies with more than 1,200 stores and over 32,000 employees worldwide. More detailed information on the company is available at www.bordersgroupinc.com.

Safe Harbor Statement

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. One can identify these forward-looking statements by the use of words such as "projects," "expect," "estimates," "look," "continuing," "committed," "plans," "guidance," "will," "may," "intends," "anticipates," and other words of similar meaning. One can also identify them by the fact that they do not relate strictly to historical or current facts. These statements are likely to address matters such as the company's future financial performance (including sales and earnings guidance), its plans relating to store openings, closings and remodels, the addition of the Seattle's Best Coffee and Paperchase brands to new and certain remodeled stores and its intentions with respect to dividend payments and share repurchases.

These statements are subject to risks and uncertainties that could cause actual results and plans to differ materially from those included in the company's forward-looking statements. These risks and uncertainties include, but are not limited to, consumer demand for the company's products, particularly during the holiday season, which is believed to be related to general economic and geopolitical conditions, weather, and other factors; changes in accounting rules; asset impairments relating to under-performing stores or other unusual items; an unexpected increase in competition; uninsured losses from risks such as terrorism, earthquakes, or floods for which no, or limited, insurance coverage is maintained; higher than anticipated interest costs; energy disruptions, shortages or higher than anticipated energy costs; adverse litigation expenses or results; unanticipated work stoppages or increased labor costs; higher than anticipated merchandise or occupancy costs; the performance of the company's strategic initiatives, including international expansion; the stability and capacity of the company's information systems; and changes in foreign currency exchange rates.

Exhibit 99.1 to the company's Form 10-K for the fiscal year ended Jan. 23, 2005 filed with the Securities and Exchange Commission sets forth a more detailed discussion of these and other risk factors that could cause actual results and plans to differ materially from those included in the forward-looking statements, and that discussion is incorporated herein by reference. The company does not undertake any obligation to update forward-looking statements.