- A comprehensive Value of Employment program to increase employee satisfaction and loyalty, and continue to attract a diverse workforce that reflects the communities we serve, creating an even more successful store environment.
The goal of our investments is to build on our proven business plan, as we seek to differentiate our stores, accelerate our growth and deliver consistent returns to our shareholders. Here is a closer look at how our business segments performed in 2004, and how we intend to achieve these objectives.
New Stores, Remodels Increase U.S. Superstore Sales
Customers know Borders superstores for their superior book selection, welcoming atmosphere and outstanding service. Through programs like our category management initiative, we're focused on building our core book business, delivering even more of what customers want, no matter where their interests lie. We are also enhancing the design of our stores to help customers discover new products, new passions and new reasons to return to Borders again and again.
Consistent with our business plan, we opened 19 new domestic Borders superstores in 2004, and remodeled 33 others. These initiatives helped boost superstore sales in the U.S. by 4.8% to $2.59 billion during the year, increasing our share of the domestic retail book market.
While accelerating same-store sales growth remains a challenge, we are beginning to make measurable progress. Through targeted marketing programs and enhanced in-store displays and presentation, book sales at Borders superstores on a same-store basis increased by 2% during the fourth quarter, beating the industry. The redesign of our new and remodeled stores also shows great promise, generating higher sales — and larger transaction sizes — in line with our goals.
Building on these successes, we plan to open 15 to 20 new domestic superstores during 2005. In addition, we will remodel 80 to 100 existing locations, leveraging our agreement with Seattle's Best Coffee and new ownership of Paperchase to improve our cafe and gifts and stationery businesses (see Coming to a Store Near You).
International Expands Presence, Increases Profits
From Sydney to San Juan, the popularity and performance of Borders Group stores outside of the United States have never been stronger. During 2004, International segment sales — including our Paperchase acquisition — increased 25.3% to $510.7 million, fueled by new store growth and favorable currency exchange rates. The segment achieved full year profitability, posting net income of $5.6 million, compared to a net loss of $1.3 million in 2003.
