CFO Mark Bierley said that in addition to the difficult retail environment, sales were down because of the company's decision to reduce inventory, which he said Borders continues to refine with publishers and other vendors. He believes that disruptions caused by that process should come to an end by the second half of the year. Another factor in the sales decline was poor execution in communicating to customers the retailer's offerings. "We've got to become better booksellers," Bierley said. He reiterated Marshall's remarks that improving sales is where the company's priority is right now.

At last week's annual meeting Marshall said expanding Borders's children's section was one way to grow sales, and Bierley said "we are undersized in kids." The company will spend the second quarter expanding the children's section, which he said ranges from infant through teens. Expansion will come in areas that use to be occupied by music and movie titles. The company has been steadily reducing that inventory and Bierley said the amount of music and movie offerings are about where the company wants them to be.