With bookstores losing money, mergers loom

By Karl Schneider     March 23, 2007

Even the prospect of the upcoming Harry Potter novel can't stop the chatter of a possible merger of Barnes & Noble and Borders due to lackluster financial outlooks.

Due to the gloomy financial forecast, Borders has said it would close nearly half of its Waldenbooks stores, weigh options for its international units and start selling books through its own Web site, ending its arrangement with Amazon.com.

Barnes & Noble, also going through rough financial times, attributed some of it's lower earnings forecast to price-cutting on the forthcoming Harry Potter book.

Borders posted a net loss of $73.6 million, or $1.25 per share, for its fourth quarter, while Barnes & Noble expects a loss of 8 to 12 cents per share.