EXHIBIT
      99.1








CAUTIONARY
      STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION


REFORM
      ACT OF 1995—“SAFE HARBOR” FOR FORWARD-LOOKING STATEMENTS





This
      report and other written reports and oral statements made from time to time
      by
      Borders Group, Inc. (the “Company”) may contain so-called “forward-looking”
statements, all of which are subject to risks and uncertainties. One can
      identify these forward-looking statements by the use of words such as “expects,”
“seeing,” “anticipates,” “plans,” “agendas,” “will,” “estimates,” “believes,”
“may,” “indicates,” “forecasts,” “focusing,” “guidance,” “outlook,” “projects,”
“initiatives,” “strives,” “seeks,” “goals,” “objectives “assumes,” “looks,”
“should,” “supports,” “comfortable with,” “confident,” and other words of
      similar meaning. One also can identify them by the fact that they do not relate
      strictly to historical or current facts. These statements are likely to address
      the Company’s growth strategy, future financial performance (including sales and
      earnings projections), shareholder value, share repurchases, strategic
      alternatives, potential alliances or the anticipated benefits there from,
      marketing and expansion plans, its plans related to store openings, closings
      and
      remodels, the addition of the Seattle’s Best Coffee and Paperchase brands to
      certain Borders stores, and the impact of growth initiatives. One must carefully
      consider any such statement and should understand that many factors could cause
      actual results to differ materially from the Company’s forward-looking
      statements. These factors include inaccurate assumptions and a broad variety
      of
      risks and uncertainties, including some that are known and some that are not.
      Although it is not possible to predict or identify all such factors, they may
      include the following:





-  consumer
      demand for the Company’s products, particularly during the holiday season, which
      is believed to be related to a number of factors, including general economic
      and
      geopolitical conditions and overall consumer spending patterns, weather
      conditions and, with respect to the mall business, overall mall
      traffic;





-  an
      unexpected increase in competition, including Internet competition and
      competition resulting from electronic or other alternative methods of delivery
      of books, music, videos and other products to consumers, or unanticipated margin
      or other disadvantages relative to our competitors;





-  asset
      impairments relating to under-performing stores or other unusual
      items;





-  changes
      in accounting rules;





-  the
      continued availability of adequate capital to fund the Company’s
      operations;





-  uninsured
      losses from risks such as terrorism, earthquakes or floods for which no, or
      limited, insurance coverage is maintained;





-  higher
      than anticipated interest, occupancy, labor, distribution and inventory
      shrinkage costs;





-  energy
      disruptions, shortages or higher than anticipated energy costs;





-  adverse
      litigation expenses or results;





-  unanticipated
      work stoppages or increased labor costs;





-  higher
      than anticipated costs associated with the closing of under performing
      stores;





-  unanticipated
      increases in the cost of the merchandise sold by the Company or in occupancy
      costs;





-  the
      performance of the Company’s initiatives, including international expansion, the
      Seattle’s Best and Paperchase initiatives and the store remodel
      program;





-  the
      stability and capacity of the Company’s information systems;





-  unanticipated
      costs or problems relating to the informational technology systems required
      for
      the operations of the Company





-  changes
      in foreign currency exchange rates; and





-  the
      continued ability of the Company to locate and develop suitable sites for its
      superstore expansion and kiosk programs.





The
      Company does not undertake any obligation to update forward-looking
      statements.