Borders and Berjaya Group Berhad Sign Memorandum of Understanding for Borders Franchise in Malaysia.

ANN ARBOR, Mich. -- Borders Inc., a subsidiary of global book, music and movie retailer Borders Group Inc. (NYSE:BGP), announced today that it has signed a memorandum of understanding with Berjaya Group Berhad, a publicly listed diversified corporation headquartered in Malaysia, to establish a franchise arrangement under which Berjaya will operate Borders stores in Malaysia.

The first of what is expected to be multiple Borders stores in Malaysia will be located in Kuala Lumpur at Berjaya Times Square, the country's largest shopping mall, and is expected to open in April 2005. Upon execution, it will be the first ever franchise arrangement for Borders. Plans are for Borders to source the titles offered in the store -- primarily English language, but also Malay and Chinese language books -- and to provide training and systems support, while Berjaya will operate the store consistent with the Borders brand experience. Terms and conditions of the anticipated agreement will not be disclosed.

"We look forward to expansion into Malaysia as an extension of the successful presence we have in Singapore, where the first Borders store outside the U.S. was opened in 1997," said Vin Altruda, president of Borders stores worldwide. "Borders Group's international expansion is a key part of our company's overall growth strategy and is expected to be a growing portion of our sales and profits," he continued. "We're excited about expanding in Malaysia through Berjaya, a company that is respected globally for its expertise in property development and management, financial services, consumer marketing and development of franchise opportunities for brands such as Starbucks, 7-Eleven, and others. Based on its successful track record, we believe Berjaya is a first-rate choice to operate the first Borders franchise in the world."

"We are privileged to be the first Borders franchisee in the world and we look forward to a mutually rewarding relationship with Borders in the coming years," said Tan Sri Dato Seri Vincent Tan, chairman and chief executive officer of Berjaya. "With the focus on reading and literacy, the marketplace is ready for expanded choice in book retailers. With the vast assortment Borders stores offer within a welcoming shopping environment, we are confident customers will embrace the Borders brand in Malaysia."

About Borders Group

Borders Group Inc. (NYSE:BGP) 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.

About Berjaya Group Berhad

Berjaya Group Berhad is a Malaysian conglomerate publicly listed on the Bursa Malaysia Securities Berhad (formerly known as Kuala Lumpur Stock Exchange) with core business ventures in consumer marketing and direct selling, financial services, vacation timeshare, hotels, resorts and recreational development, property investment and development, industrial, gaming and lottery management and investment holding.

Safe Harbor Statement

This release contains forward-looking statements within the meaning of the Private Securities Litigation and Reform Act of 1995. One can identify these forward-looking statements by use of words such as "may," "will," "anticipates," "plans," "look forward," "expects," and other words of similar meaning. 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. The forward-looking statements include plans for international expansion and potential franchise agreements and the impact on future sales and profits and other future benefits that may result from such expansion and agreements. More information about factors that potentially could affect Borders Group's results is included in Borders Group's filing with the Securities and Exchange Commission, including its quarterly report on Form 10-Q for the fiscal quarter ended July 25, 2004 and all subsequent annual reports on Form 10-K and quarterly reports on Form 10-Q.