Borders Group Revises Sales and Earnings Guidance.

ANN ARBOR, Mich. -- Borders Group Inc. (NYSE:BGP) today revised sales and earnings guidance for the fiscal third quarter, which ends Oct. 24. Management now projects a consolidated loss of $0.01 to $0.03 per share for the period versus consolidated earnings per share of $0.01 to $0.03 as previously projected.

On a quarter-to-date basis through Oct. 10, comparable store sales at Borders have declined by 1.9% and declined by 4.5% at Waldenbooks. With less than two weeks remaining in the period, final third quarter comparable store sales are not expected to change significantly from these quarter-to-date figures. These results compare to management's previous guidance for comparable store sales at Borders to be flat to up slightly and flat to down slightly at Waldenbooks.

Total sales in the company's International segment are up 27.1% on a quarter-to-date basis, which is above prior management projections for an increase of 20% to 25% over third quarter 2003.

"Weaker than anticipated sales caused us to revise guidance," said Borders Group Chief Executive Officer Greg Josefowicz. "A combination of factors, including multiple hurricanes, the presidential election campaign, and overall store traffic that was lighter than anticipated negatively impacted sales. Borders Group has managed costs as diligently as possible to minimize the impact of sluggish sales trends on earnings, while investing appropriately to meet improved consumer demand we hope to see once we're past the November elections and into the holiday period."

In addition to revising third quarter guidance, Borders Group is also, for the first time, providing management guidance for the fourth quarter and restating expectations for the full year. For the fourth quarter, comparable store sales at Borders are expected to range from flat to a decline in the low single digits. At Waldenbooks comparable store sales for the period are projected to decline in the low single digits. Total International sales are anticipated to increase by approximately 25% over a year ago. Fourth quarter consolidated earnings per share are expected to range from $l.55 to $1.62. Fourth quarter earnings per share estimates include the impact of non-operating adjustments projected to be an after-tax charge of $0.04 to $0.06 per share.

For the full year 2004, Borders Group now anticipates consolidated earnings per share of $1.66 to $1.73 versus the $1.72 to $1.77 range previously projected. This new range represents growth of 9% to 14% over 2003. Comparable store sales for the year for Borders are now expected to be flat to down slightly instead of the previously projected low single digit increase. Waldenbooks' comparable store sales are now projected to decline in the low single digits in comparison to the company's previous projection of flat to down slightly. For the full year, total sales for the International segment are expected to increase by approximately 25% over 2003, which is in-line with previous management guidance. Full-year earnings per share estimates include the impact of non-operating adjustments projected for the year to be an after-tax charge of $0.04 to $0.06 per share.

Next Financial Release/Conference Call

Borders Group will issue final third quarter results after market close Nov. 16 with a conference call to follow Nov. 17 at 8 a.m. Eastern.

About Borders Group

Borders Group Inc. is a leading global retailer of books, music and movies with annual revenues of $3.7 billion. Headquartered in Ann Arbor, Mich., the company employs approximately 32,000 people worldwide. Borders Group operates over 450 Borders superstores and approximately 700 Waldenbooks stores throughout the U.S. In addition, the company operates 39 Borders superstores outside the U.S., as well as 36 Books etc. stores located throughout Great Britain. Borders Group recently acquired Paperchase Products Limited, a leading stationery retailer in the U.K. with 65 locations. Teamed with Amazon.com, online shopping is available through Borders.com (www.borders.com) and Waldenbooks.com (www.waldenbooks.com). More detailed information on the company is available at www.bordersgroupinc.com. Information regarding Borders store locations, in-store events and title reservation is available through www.bordersstores.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 "projected," "expected," "estimates," "look," "continuing," "plans," "guidance," "will," "may," "intends," "anticipated," "hope," 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 and closings 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 rate.

Exhibit 99.1 to the company's Form 10-Q for the fiscal quarter ended July 25, 2004 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.