Borders ends Amazon pairing, creates own site

Borders Group Inc. is returning to online retailing after seven years paired with Amazon.com Inc., but analysts say it will be a challenge for the nation’s second-largest bookseller to compete with established Web retailers.

The move comes as Borders, which has said it may put itself up for sale, has lost market share to online retailers and to discounters such as Wal-Mart Stores Inc. amid a difficult economic climate in the United States.

It’s a long shot, analysts say, in an environment in which people are spending less and Amazon.com rules.

“Amazon just dominates,” said Fred Crawford, managing director at turnaround consultant AlixPartners who has studied consumer attitudes toward major booksellers. “Amazon is nearly unassailable.”

In 2001, Borders abandoned its money-losing online business, turning it over to Amazon. Under that arrangement, Borders.com took shoppers to a site partnered with Amazon, while a website for its stores allowed shoppers to check inventories and reserve items.

Seattle-based Amazon says it doesn’t comment on the strategies of other companies and didn’t have any comment on the end of the Borders partnership.

Tuesday’s launch of Borders’ website comes more than two months after the Ann Arbor, Mich.-based company announced it might put itself up for sale. Just last week, Barnes & Noble Inc. confirmed that it put together a team to study the feasibility of a deal.

Borders on Tuesday reported a narrower loss in the first quarter.

The net loss narrowed to $31.7 million, or 53 cents a share, from $35.9 million, or 61 cents, a year earlier. Revenue fell less than 1% to $792.5 million.

Thomson Financial said analysts expected a loss of 47 cents a share.

Shares of Borders fell 25 cents to $6 in after-hours trading after closing down 47 cents before the earnings news.