| [X]            | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE  |
|----------------|-----------------------------------------------------------|
|           | SECURITIES EXCHANGE ACT OF 1934                           |
|           |                                                      |
|           | For the quarterly period ended October 30, 2010           |
|           |                                                      |
|           | OR                                                        |
|           |                                                      |
| [  ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE |
|           | SECURITIES EXCHANGE ACT OF 1934                           |

| MICHIGAN                        |   | 38-3294588                     |
|---------------------------------|--------|--------------------------------|
| (State or other jurisdiction of |   | (I.R.S. Employer               |
| incorporation or organization)  |   | Identification  No.) |

|   | Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes   ̈    No  þ |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                         |   |   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|                                                                                                                                                                         |   |   |   |
|                                                                                                                                                                         |   | Page   |   |
| Part I - Financial Information                                                                                                                                               |   |   |   |
|                                                                                                                                                                         |   |   |   |
|      Item 1.       Financial Statements                                                                          |   |   | 1      |   |
|      Item 2.       Management's Discussion and Analysis of                                                       |   |   |   |   |
|                        Financial Condition and Results of |   |   |   |   |
|                        Operations                         |   |   | 19     |   |
|      Item 3.       Quantitative and Qualitative Disclosures about                                                |   |   |   |   |
|                         Market Risk                  |   |   | 31     |   |
|      Item 4.       Controls and Procedures                                                                       |   |   | 31     |   |
|                                                                                                                                                                         |   |   |   |   |
| Part II - Other information                                                                                                                                                  |   |   |   |   |
|                                                                                                                                                                         |   |   |   |   |
|      Item 1.       Legal Proceedings                                                                             |   |   | 31     |   |
|      Item 1A.    Risk Factors                                                                                                   |   |   | 31     |   |
|      Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds                                                    |   |   | 32     |   |
|      Item 3.       Defaults Upon Senior Securities                                                               |   |   | N/A    |   |
|      Item 4.       (Removed and Reserved)                                                                        |   |   | N/A    |   |
|      Item 5.       Other Information                                                                             |   |   | N/A    |   |
|      Item 6.       Exhibits                                                                                      |   |   | 33     |   |
|                                                                                                                                                                         |   |   |   |   |
| Signatures                                                                                                                                                                   |   |   | 34     |   |

----

|                                                                                                           |   | 13 Weeks Ended  |   |
|----------------------------------------------------------------------------------------------------------------|--------|-----------------|--------|
|                                                                                                      |   | October 30,2010 |   |   | October 31,2009 |   |
| Sales                                                                                                          |   | $               | 470.9  |   |   | $ | 571.4 |   |
| Other revenue                                                                                                  |   |            | 4.7    |   |   |   | 6.4 |   |
|    Total revenue                                                                                |   |            | 475.6  |   |   |   | 577.8 |   |
|                                                                                                           |   |            |   |   |   |   |   |   |
| Cost of merchandise sold, including occupancy costs                                                            |   |            | 403.1  |   |   |   | 471.8 |   |
|     Gross margin                                                                           |   |            | 72.5   |   |   |   | 106.0 |   |
|                                                                                                           |   |            |   |   |   |   |   |   |
| Selling, general and administrative expenses                                                                   |   |            | 144.2  |   |   |   | 165.9 |   |
| Asset impairments and other writedowns                                                                         |   |            | -      |   |   |   | 0.2 |   |
|    Operating loss                                                                               |   |            | (71.7  | ) |   |   | (60.1 | ) |
|                                                                                                           |   |            |   |   |   |   |   |   |
| Interest expense                                                                                               |   |            | 7.9    |   |   |   | 6.3 |   |
| Warrant / put income                                                                                           |   |            | (6.0   | ) |   |   | (28.7 | ) |
|    Total interest expense (income)                                                              |   |            | 1.9    |   |   |   | (22.4 | ) |
|    Loss before income taxes                                                                     |   |            | (73.6  | ) |   |   | (37.7 | ) |
|                                                                                                           |   |            |   |   |   |   |   |   |
| Income tax provision                                                                                           |   |            | 0.8    |   |   |   | - |   |
|    Loss from continuing operations                                                              |   | $               | (74.4  | ) |   | $ | (37.7 | ) |
|                                                                                                           |   |            |   |   |   |   |   |   |
| Loss from operations of discontinued operations (net of tax)                                                   |   |            | -      |   |   |   | (0.8 | ) |
| Gain from disposal of discontinued operations (net of tax)                                                     |   |            | -      |   |   |   | 0.8 |   |
|    Gain from discontinued operations (net of tax)                                               |   |            | -      |   |   |   | - |   |
|    Net loss                                                                                     |   | $               | (74.4  | ) |   | $ | (37.7 | ) |
|                                                                                                           |   |            |   |   |   |   |   |   |
| Loss per common share data  (Note 8)                                                                 |   |            |   |   |   |   |   |   |
|    Basic:                                                                                       |   |            |   |   |   |   |   |   |
|       Loss from continuing operations per common share                           |   | $               | (1.03  | ) |   | $ | (0.63 | ) |
|       Gain from discontinued operations per common share                         |   | $               | -      |   |   | $ | - |   |
|       Net loss per common share                                                  |   | $               | (1.03  | ) |   | $ | (0.63 | ) |
|                                                                                                           |   |            |   |   |   |   |   |   |
|          Weighted average common shares outstanding (in millions) |   |            | 71.9   |   |   |   | 60.1 |   |

|    Diluted:                                                                                     |   |   |   |   |   |   |
|----------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|       Loss from continuing operations per common share                           |   | $      | (1.03  | )      |   | $      | (0.98 | ) |
|       Gain from discontinued operations per common share                         |   | $      | -      |   |   | $      | - |   |
|       Net loss per common share                                                  |   | $      | (1.03  | )      |   | $      | (0.98 | ) |
|                                                                                                           |   |   |   |   |   |   |   |   |
|          Weighted average common shares outstanding (in millions) |   |   | 71.9   |   |   |   | 67.5 |   |

----

|                                                                                                           |   | 39 Weeks Ended  |    |
|----------------------------------------------------------------------------------------------------------------|--------|-----------------|---------|
|                                                                                                      |   | October 30,2010 |    |   | October 31,2009 |   |
| Sales                                                                                                          |   | $               | 1,517.0 |   |   | $ | 1,785.4 |   |
| Other revenue                                                                                                  |   |            | 13.7    |   |   |   | 22.3 |   |
|    Total revenue                                                                                |   |            | 1,530.7 |   |   |   | 1,807.7 |   |
|                                                                                                           |   |            |    |   |   |   |   |   |
| Cost of merchandise sold, including occupancy costs                                                            |   |            | 1,255.4 |   |   |   | 1,428.7 |   |
|     Gross margin                                                                           |   |            | 275.3   |   |   |   | 379.0 |   |
|                                                                                                           |   |            |    |   |   |   |   |   |
| Selling, general and administrative expenses                                                                   |   |            | 419.0   |   |   |   | 494.3 |   |
| Asset impairments and other writedowns                                                                         |   |            | -       |   |   |   | 0.3 |   |
|    Operating loss                                                                               |   |            | (143.7  | ) |   |   | (115.6 | ) |
|                                                                                                           |   |            |    |   |   |   |   |   |
| Interest expense                                                                                               |   |            | 23.8    |   |   |   | 18.0 |   |
| Warrant / put expense                                                                                          |   |            | 21.9    |   |   |   | 35.1 |   |
|    Total interest expense                                                                       |   |            | 45.7    |   |   |   | 53.1 |   |
|    Loss before income taxes                                                                     |   |            | (189.4  | ) |   |   | (168.7 | ) |
|                                                                                                           |   |            |    |   |   |   |   |   |
| Income tax provision                                                                                           |   |            | 1.6     |   |   |   | 1.1 |   |
|    Loss from continuing operations                                                              |   | $               | (191.0  | ) |   | $ | (169.8 | ) |
|                                                                                                           |   |            |    |   |   |   |   |   |
| Loss from operations of discontinued operations (net of tax)                                                   |   |            | (2.4    | ) |   |   | (0.3 | ) |
| Gain from disposal of discontinued operations (net tax)                                                        |   |            | 8.2     |   |   |   | 0.8 |   |
| Gain from discontinued operations (net of tax)                                                                 |   |            | 5.8     |   |   |   | 0.5 |   |
|                                                                                                           |   |            |    |   |   |   |   |   |
|    Net loss                                                                                     |   | $               | (185.2  | ) |   | $ | (169.3 | ) |
|                                                                                                           |   |            |    |   |   |   |   |   |
|                                                                                                           |   |            |    |   |   |   |   |   |
| Loss per common share data (Note 8)                                                                            |   |            |    |   |   |   |   |   |
|    Basic:                                                                                       |   |            |    |   |   |   |   |   |
|       Loss from continuing operations per common share                           |   | $               | (2.85   | ) |   | $ | (2.83 | ) |
|       Gain from discontinued operations per common share                         |   | $               | 0.09    |   |   | $ | 0.01 |   |
|       Net loss per common share                                                  |   | $               | (2.76   | ) |   | $ | (2.82 | ) |
|                                                                                                           |   |            |    |   |   |   |   |   |
|          Weighted average common shares outstanding (in millions) |   |            | 67.1    |   |   |   | 60.1 |   |

|    Diluted:                                                                                     |   |   |   |   |   |   |
|----------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|       Loss from continuing operations per common share                           |   | $      | (2.85  | )      |   | $      | (2.83 | ) |
|       Gain from discontinued operations per common share                         |   | $      | 0.09   |   |   | $      | 0.01 |   |
|       Net loss per common share                                                  |   | $      | (2.76  | )      |   | $      | (2.82 | ) |
|                                                                                                           |   |   |   |   |   |   |   |   |
|          Weighted average common shares outstanding (in millions) |   |   | 67.1   |   |   |   | 60.1 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |            |               |   |            |   |         |            |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|--------------------|--------|-----------------|--------|--------------|-----------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | October 30,2010 |               |   | October 31,2009 |   |         | January 30,2010 |   |
| Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |            |               |   |            |   |         |            |   |
| Current assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |            |               |   |            |   |         |            |   |
|    Cash and cash equivalents                                                                                                                   |   | $               | 23.1               |   |            | $      | 28.5         |            |   | $ | 17.9 |   |
|    Merchandise inventories                                                                                                                     |   |            | 895.8              |   |            |   | 1,129.5      |            |   |   | 854.1 |   |
|    Accounts receivable and other current assets                                                                                                |   |            | 60.5               |   |            |   | 62.9         |            |   |   | 66.1 |   |
|    Deferred income taxes                                                                                                                       |   |            | -                  |   |            |   | -            |            |   |   | 1.1 |   |
|    Current assets of discontinued operations                                                                                                   |   |            | -                  |   |            |   | 45.2         |            |   |   | 39.5 |   |
|          Total current assets                                                                                    |   |            | 979.4              |   |            |   | 1,266.1      |            |   |   | 978.7 |   |
| Property and equipment, net of accumulated depreciation of   $976.1, $965.7 and $944.2 at October 30, 2010, October 31, 2009 and January 30, 2010, respectively                                                                                                                                                                                                                                                                                                                                                                                      |   |            |    325.2 |   |            |   |   407.5 |            |   |   |   372.8 |   |
| Other assets                                                                                                                                                  |   |            | 48.1               |   |            |   | 30.1         |            |   |   | 34.0 |   |
| Deferred income taxes                                                                                                                                         |   |            | 3.9                |   |            |   | 10.3         |            |   |   | 1.9 |   |
| Noncurrent assets of discontinued operations                                                                                                                  |   |            | -                  |   |            |   | 25.4         |            |   |   | 28.2 |   |
|          Total assets                                                                                            |   | $               | 1,356.6            |   |            | $      | 1,739.4      |            |   | $ | 1,415.6 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |            |               |   |            |   |         |            |   |   |   |   |
|            Liabilities and Stockholders’ Equity (Deficit)                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |            |               |   |            |   |         |            |   |   |   |   |
| Current liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |            |               |   |            |   |         |            |   |   |   |   |
|    Short-term borrowings and current portion of long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $               | 298.4              |   |            | $      | 401.8        |            |   | $ | 275.4 |   |
|    Trade accounts payable                                                                                                                      |   |            | 444.9              |   |            |   | 583.9        |            |   |   | 345.1 |   |
|    Accrued payroll and other liabilities                                                                                                       |   |            | 215.8              |   |            |   | 228.1        |            |   |   | 252.3 |   |
|    Taxes, including income taxes                                                                                                               |   |            | 31.8               |   |            |   | 41.5         |            |   |   | 32.4 |   |
|    Deferred income taxes                                                                                                                       |   |            | 3.8                |   |            |   | 6.5          |            |   |   | - |   |
|    Current liabilities of discontinued operations                                                                                              |   |            | -                  |   |            |   | 17.7         |            |   |   | 12.9 |   |
|          Total current liabilities                                                                               |   |            | 994.7              |   |            |   | 1,279.5      |            |   |   | 918.1 |   |
| Long-term debt                                                                                                                                                |   |            | 55.8               |   |            |   | 6.0          |            |   |   | 6.6 |   |
| Other long-term liabilities                                                                                                                                   |   |            | 346.9              |   |            |   | 348.0        |            |   |   | 325.6 |   |
| Long-term liabilities of discontinued operations                                                                                                              |   |            | -                  |   |            |   | 6.7          |            |   |   | 7.0 |   |
|          Total liabilities                                                                                       |   |            | 1,397.4            |   |            |   | 1,640.2      |            |   |   | 1,257.3 |   |
| Stockholders' equity (deficit):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |            |               |   |            |   |         |            |   |   |   |   |
| Common stock; 300,000,000 shares authorized;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |            |               |   |            |   |         |            |   |   |   |   |
|    72,072,310, 60,024,029 and 59,869,384 shares issued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |            |               |   |            |   |         |            |   |   |   |   |
|    and outstanding at October 30, 2010, October 31, 2009 and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |            |               |   |            |   |         |            |   |   |   |   |
|    January 30, 2010, respectively                                                                                                              |   |            | 187.7              |   |            |   | 186.8        |            |   |   | 187.2 |   |
| Accumulated other comprehensive income                                                                                                                        |   |            | -                  |   |            |   | 17.9         |            |   |   | 16.7 |   |
| Retained deficit                                                                                                                                              |   |            | (228.5             | )      |            |   | (105.5       | )               |   |   | (45.6 | ) |
|     Total stockholders' equity (deficit)                                                                                                  |   |            | (40.8              | )      |            |   | 99.2         |            |   |   | 158.3 |   |
|          Total liabilities and stockholders' equity (deficit)                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $               | 1,356.6            |   |            | $      | 1,739.4      |            |   | $ | 1,415.6 |   |

----

|                                                                                                                                                                                                                                                                               |   |                     |       |   |                                      |   |   |     |   |   |    |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|------------|--------|-------------------------------------------|--------|--------|----------|--------|--------|---------|--------|
|                                                                                                                                                                                                                                                                               |   |   Common Stock |       |   |   AccumulatedOtherComprehensive |   |   | Retained |   |   |    |   |
|                                                                                                                                                                                                                                                                               |   | Shares                   |       |   | Amount                                    |   |   | Income   |   |   | Deficit |   |   | Total |   |
| Balance at January 30, 2010                                                                                                                                                                                                                                                        |   |                     | 59,869,384 |   |                                      | $      | 187.2  |     |   | $      | 16.7    |   |   | $ | (45.6 | ) |   | $ | 158.3 |   |
| Net loss                                                                        |   |                     |       |   |                                      |   |   |     |   |   |    |   |   |   | (185.2 | ) |   |   | (185.2 | ) |
| Discontinued operations currency translation adjustment                                                                                                                                                                                                                            |   |                     |       |   |                                      |   |   |     |   |   | (16.7   | )      |   |   |   |   |   |   | (16.7 | ) |
| Comprehensive loss                                                              |   |                     |       |   |                                      |   |   |     |   |   |    |   |   |   |   |   |   |   | (201.9 | ) |
| Deconsolidation of VIEs                                                                                                                                                                                                                                                            |   |                     |       |   |                                      |   | (0.3   | )        |   |   |    |   |   |   | 2.3 |   |   |   | 2.0 |   |
| Equity transaction                                                              |   |                     | 11,111,111 |   |                                      |   |   |     |   |   |    |   |   |   |   |   |   |   |   |   |
| Issuance of common stock                                                                                                                                                                                                                                                           |   |                     | 1,505,530  |   |                                      |   | 2.3    |     |   |   |    |   |   |   |   |   |   |   | 2.3 |   |
| Repurchase and retirementof common stock                                        |   |                     | (413,715   | )      |                                      |   | (1.5   | )        |   |   |    |   |   |   |   |   |   |   | (1.5 | ) |
| Balance at October 30, 2010                                                                                                                                                                                                                                                        |   |                     | 72,072,310 |   |                                      | $      | 187.7  |     |   | $      | -       |   |   | $ | (228.5 | ) |   |   | (40.8 | ) |
|                                                                                                                                                                                                                                                                               |   |                     |       |   |                                      |   |   |     |   |   |    |   |   |   |   |   |   |   |   |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 39 weeks Ended  |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | October 30,2010 |   |   | October 31,2009 |   |
| Cash provided by (used for):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |            |   |   |   |   |
|    Net loss                                                                                                                                                                     |   | $               | (185.2 | ) |   | $ | (169.3 | ) |
|    Gain from discontinued operations                                                                                                                                            |   |            | 5.8    |   |   |   | 0.5 |   |
|    Loss from continuing operations                                                                                                                                              |   |            | (191.0 | ) |   |   | (169.8 | ) |
| Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |            |   |   |   |   |   |   |
|    Adjustments to reconcile loss from continuing operations to operating cash flows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |            |   |   |   |   |   |   |
|       Depreciation                                                                                                                                               |   |            | 57.5   |   |   |   | 72.2 |   |
|       Loss on disposal of assets                                                                                                                                 |   |            | 0.9    |   |   |   | 1.1 |   |
|       Stock-based compensation cost                                                                                                                              |   |            | 0.4    |   |   |   | 0.2 |   |
|       Increase in warrant liability                                                                                                                              |   |            | 19.6   |   |   |   | 23.2 |   |
|       (Increase) decrease in deferred income taxes                                                                                                               |   |            | 2.9    |   |   |   | (4.7 | ) |
|       Decrease in other long-term assets                                                                                                                         |   |            | 5.9    |   |   |   | 4.0 |   |
|       Decrease in other long-term liabilities                                                                                                                    |   |            | (19.9  | ) |   |   | (18.4 | ) |
|       Write-off of intangible asset                                                                                                                              |   |            | -      |   |   |   | 16.2 |   |
|       Asset impairments and other writedowns                                                                                                                     |   |            | -      |   |   |   | 0.3 |   |
|       Amortization of term loan discounts                                                                                                                        |   |            | 1.3    |   |   |   | 2.6 |   |
|    Cash provided by (used for) current assets and current liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |            |   |   |   |   |   |   |
|       Increase in inventories                                                                                                                                    |   |            | (41.7  | ) |   |   | (234.7 | ) |
|       Decrease in accounts receivable                                                                                                                            |   |            | 11.0   |   |   |   | 15.2 |   |
|       Increase in prepaid expenses                                                                                                                               |   |            | (4.7   | ) |   |   | (2.0 | ) |
|       Increase in trade accounts payable                                                                                                                         |   |            | 99.8   |   |   |   | 236.8 |   |
|       Increase (decrease) in taxes payable                                                                                                                       |   |            | (0.6   | ) |   |   | 16.9 |   |
|       Decrease in accrued payroll and other liabilities                                                                                                          |   |            | (35.9  | ) |   |   | (47.0 | ) |
|           Net cash used for operating activities of continuing operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |            | (94.5  | ) |   |   | (87.9 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |            |   |   |   |   |   |   |
| Investing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |            |   |   |   |   |   |   |
|    Capital expenditures                                                                                                                                                         |   |            | (16.6  | ) |   |   | (8.0 | ) |
|    Proceeds from the sale of discontinued operations                                                                                                                            |   |            | 31.2   |   |   |   | - |   |
|           Net cash provided by (used for) investing activities of continuing operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |            | 14.6   |   |   |   | (8.0 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |            |   |   |   |   |   |   |
| Financing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |            |   |   |   |   |   |   |
|    Net funding from credit facility                                                                                                                                             |   |            | 62.7   |   |   |   | 73.3 |   |
|    Repayment of prior term loan financing                                                                                                                                       |   |            | (42.5  | ) |   |   | - |   |
|    Proceeds from the issuance of  short-term debt                                                                                                                     |   |            | 10.0   |   |   |   | - |   |
|    Proceeds from the issuance of long-term debt                                                                                                                                 |   |            | 80.0   |   |   |   | - |   |
|    Deferred financing costs paid                                                                                                                                                |   |            | (24.7  | ) |   |   | - |   |
|    Repayment of long-term capital lease obligations                                                                                                                             |   |            | (1.0   | ) |   |   | (0.8 | ) |
|    Repayment of short-term debt                                                                                                                                                 |   |            | (7.9   | ) |   |   | - |   |
|    Repayment of long-term debt                                                                                                                                                  |   |            | (22.2  | ) |   |   | - |   |
|    Issuance of common stock, net                                                                                                                                                |   |            | 0.4    |   |   |   | (0.8 | ) |
|    Equity transaction                                                                                                                                                           |   |            | 25.0   |   |   |   | - |   |
|    Net cash provided by financing activities of continuing operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |            | 79.8   |   |   |   | 71.7 |   |
| Net cash provided by operating activities of discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |            | 8.7    |   |   |   | 12.1 |   |
| Net cash used for investing activities of discontinued operations                                                                                                                              |   |            | (4.5   | ) |   |   | (3.2 | ) |
| Net cash provided by (used for) financing activities of discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |            | 1.5    |   |   |   | (0.3 | ) |
| Effect of exchange rates on cash and cash equivalents of discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |            | (0.4   | ) |   |   | 0.5 |   |
| Net cash provided by discontinued operations                                                                                                                                                   |   |            | 5.3    |   |   |   | 9.1 |   |
| Net increase (decrease) in cash and cash equivalents                                                                                                                                           |   |            | 5.2    |   |   |   | (15.1 | ) |
| Cash and cash equivalents at beginning of year                                                                                                                                                 |   |            | 17.9   |   |   |   | 43.6 |   |
| Cash and cash equivalents at end of quarter                                                                                                                                                    |   | $               | 23.1   |   |   | $ | 28.5 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                       |   | 13 Weeks Ended  |   |   | 39 Weeks Ended |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|--------|--------|---------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                       |   | October 30,2010 |   |   | October 31,2009     |   |   | October 30,2010 |   |   | October 31,2009 |   |
| Beginning reserve balance                                                                                          |   | $               | 14.5   |   |                | $      | 18.0 |   |   | $ | 17.7 |   |   | $ | 25.6 |   |
|      Current period charge                                                                |   |            | 0.4    |   |                |   | 1.5 |   |   |   | 1.8 |   |   |   | 1.9 |   |
|      Current period reserve adjustment                                                                                                                                                                                                                                                                                                                                            |   |            | 0.1    |   |                |   | (1.1 | ) |   |   | - |   |   |   | (3.5 | ) |
|      Current period cash payments                                                         |   |            | (1.0   | )      |                |   | (1.7 | ) |   |   | (5.5 | ) |   |   | (7.3 | ) |
| Ending reserve balance                                                                                             |   | $               | 14.0   |   |                | $      | 16.7 |   |   | $ | 14.0 |   |   | $ | 16.7 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                |   | 13 Weeks Ended |            |   | 39 weeks Ended |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|-----------------|--------|----------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                |   | Oct. 30, 2010  |            |   | Oct. 31, 2009  |   |   |  Oct 30, 2010 |   |   | Oct. 31, 2009 |   |
| Total revenue                                                                  |   | $              | -               |   |           | $      | 24.7 |   |   | $ | 40.8 |   |   | $ | 69.7 |   |
| Loss from operations of discontinued operations before income tax                                                                                                                                                                                                                                                                                                                                                   |   |           | -               |   |           |   |  (0.4 | ) |   |   |  (2.9 | ) |   |   |  (0.8 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                |   |           |            |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from operations of discontinued operations (net of income tax provision (benefit) of $-, $0.4, ($0.5), and ($0.5), respectively)                                                                                                                                                                                                                                                                      |   |           |   -        |   |           |   | (0.8 | ) |   |   | (2.4 | ) |   |   | (0.3 | ) |
|  Gain (loss) on disposal of discontinued operations (net of income tax benefit $-)                                                                                                                                                                                                                                                                                                                             |   |           |   -        |   |           |   |   - |   |   |   |   7.7 |   |   |   |   - |   |
|  Gain (loss) from discontinued operations (net of income tax provision (benefit) of $-, $0.4, ($0.5), and ($0.5), respectively)                                                                                                                                                                                                                                                                                |   |           |     - |   |           |   |      (0.8 | ) |   |   |      5.3 |   |   |   |      (0.3 | ) |

|                                                     |   |          |   |
|----------------------------------------------------------|--------|---------------|--------|
|                                                     |   | Oct. 31, 2009 |   |
| Cash and cash equivalents                                |   | $             | 1.8    |   |
| Merchandise inventories                                  |   |          | 27.9   |   |
| Accounts receivable and other current assets             |   |          | 15.5   |   |
| Current assets of discontinued operations                |   |          | 45.2   |   |
| Property and equipment (net of accumulated depreciation) |   |          | 19.0   |   |
| Other assets                                             |   |          | 6.0    |   |
| Deferred income taxes                                    |   |          | 0.1    |   |
| Goodwill                                                 |   |          | 0.3    |   |
| Noncurrent assets of discontinued operations             |   |          | 25.4   |   |
|                                                     |   |          |   |   |
| Trade accounts payable                                   |   |          | 13.6   |   |
| Accrued payroll and other liabilities                    |   |          | 1.8    |   |
| Taxes, including income taxes                            |   |          | 2.2    |   |
| Deferred income taxes                                    |   |          | 0.1    |   |
|  Current liabilities of discontinued operations     |   |          | 17.7   |   |
| Other long-term liabilities                              |   |          | 6.7    |   |
|  Noncurrent liabilities of discontinued operations  |   |          | 6.7    |   |

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|                     | Before re-pricing  | After re-pricing                                 |
|--------------------------|-------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Warrant fair value:      | $1.8 million            | $6.1 million                                                                                                                                                                                                     |
| Warrant exercise price:  | $7.00 per warrant(1)    | $0.65 per warrant(1)                                                                                                                                                                                             |
| Stock price:             | $0.65 per share         | $0.65 per share                                                                                                                                                                                                  |
| Stock volatility:        | 74.26%(2)               | 74.26%(2)                                                                                                                                                                                                        |
| Risk-free interest rate: | 1.82%(3)                | 1.82%(3)                                                                                                                                                                                                         |
| Annual dividend yield:   | 0%                      | 0%                                                                                                                                                                                                               |
| Expected life:           | 5.5 years(4)       | 5.5 years(4)                                                                                                                                                                                                |

| (1) | Represents contractual value.                                                     |
|-----|-----------------------------------------------------------------------------------|
| (2) | Represents volatility over the period matching the warrants’ expected life. |
| (3) | Represents the five-year treasury note rate.                                      |
| (4) | Assumes that the warrants will be held the duration of their contractual lives.   |

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| LeBow Warrants              | May 21, 2010                          |   |
|-----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Warrant fair value:         | $58.0 million                                                                                                                                                      |   |
| Warrants:                   | 35,130,000                                                                                                                                                         |   |
| Warrant exercise price:     | $2.25 per warrant(1)                                                                                                                                               |   |
| Stock price on May 21,2010: | $2.24 per share                                                                                                                                                    |   |
| Stock volatility:           | 97.55%(2)                                                                                                                                                          |   |
| Risk-free interest rate:    | 2.18%(3)                                                                                                                                                           |   |
| Annual dividend yield:      | 0%                                                                                                                                                                 |   |
| Expected life:              | 5.0 years(4)                                                                                                                                                  |   |

| (1) | Represents contractual value.                                                     |
|-----|-----------------------------------------------------------------------------------|
| (2) | Represents volatility over the period matching the warrants’ expected life. |
| (3) | Represents the five-year treasury note rate.                                      |
| (4) | Assumes that the warrants will be held the duration of their contractual lives.   |

|                         |                                                                                                                                                               |   |
|------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Pershing Square Warrants     | May 21, 2010                          |   |
| Warrant fair value:          | $21.9 million                                                                                                                                                      |   |
| Warrants:                    | 11,244,236                                                                                                                                                         |   |
| Warrant exercise price:      | $0.65 per warrant(1)                                                                                                                                               |   |
| Stock price on May 21, 2010: | $2.24 per share                                                                                                                                                    |   |
| Stock volatility:            | 104.35%(2)                                                                                                                                                         |   |
| Risk-free interest rate:     | 2.18%(3)                                                                                                                                                           |   |
| Annual dividend yield:       | 0%                                                                                                                                                                 |   |
| Expected life:               | 4.3 years(4)                                                                                                                                                  |   |

| (1) | Represents contractual value.                                                     |
|-----|-----------------------------------------------------------------------------------|
| (2) | Represents volatility over the period matching the warrants’ expected life. |
| (3) | Represents the five-year treasury note rate.                                      |
| (4) | Assumes that the warrants will be held the duration of their contractual lives.   |

----

| Pershing Square Warrants           | October 30, 2010                                 | October 31, 2009                                 |
|------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Warrant fair value:                | $25.7 million                                                                                                                                                                                                    | $24.0 million                                                                                                                                                                                                    |
| Warrants:                          | 25,944,236                                                                                                                                                                                                       | 14,700,000                                                                                                                                                                                                       |
| Warrant exercise price:            | $0.65 per warrant(1)                                                                                                                                                                                             | $0.65 per warrant(1)                                                                                                                                                                                             |
| Stock price at balance sheet date: | $1.22 per share                                                                                                                                                                                                  | $1.94 per share                                                                                                                                                                                                  |
| Stock volatility:                  | 112.82%(2)                                                                                                                                                                                                       | 89.0%(2)                                                                                                                                                                                                         |
| Risk-free interest rate:           | 0.57%(5)                                                                                                                                                                                                         | 2.37%(3)                                                                                                                                                                                                         |
| Annual dividend yield:             | 0%                                                                                                                                                                                                               | 0%                                                                                                                                                                                                               |
| Expected life:                     | 3.9 years(4)                                                                                                                                                                                                | 4.9 years(4)                                                                                                                                                                                                     |

|                               |                                                                                                                                                                                                             |   |
|------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| LeBow Warrants                     | October 30, 2010                                 |   |
| Warrant fair value:                | $28.5 million                                                                                                                                                                                                    |   |
| Warrants:                          | 35,130,000                                                                                                                                                                                                       |   |
| Warrant exercise price:            | $2.25 per warrant(1)                                                                                                                                                                                             |   |
| Stock price at balance sheet date: | $1.22 per share                                                                                                                                                                                                  |   |
| Stock volatility:                  | 101.56%(2)                                                                                                                                                                                                       |   |
| Risk-free interest rate:           | 1.18%(3)                                                                                                                                                                                                         |   |
| Annual dividend yield:             | 0%                                                                                                                                                                                                               |   |
| Expected life:                     | 4.9 years(4)                                                                                                                                                                                                     |   |

| (1) | Represents contractual value.                                                     |
|-----|-----------------------------------------------------------------------------------|
| (2) | Represents volatility over the period matching the warrants’ expected life. |
| (3) | Represents the five-year treasury note rate.                                      |
| (4) | Assumes that the warrants will be held the duration of their contractual lives.   |
| (5) | Represents the three-year treasury note rate.                                     |

|                                                       |   | 13 weeks ended |   |   | 39 weeks ended |   |
|------------------------------------------------------------|--------|----------------|--------|--------|----------------|--------|
|                                                       |   | Oct. 30, 2010  |   |   | Oct. 31, 2009  |   |   | Oct. 30, 2010 |   |   | Oct. 31, 2009 |   |
| Beginning balance                                          |   | $              | 60.2   |   |           | $      | 52.6 |   |   | $ | 9.5 |   |   | $ | 0.7 |   |
| Re-pricing of Pershing Square warrants                     |   |           | -      |   |           |   | - |   |   |   | - |   |   |   | 4.3 |   |
| LeBow warrants committed to May 21, 2010                   |   |           | -      |   |           |   | - |   |   |   | 58.0 |   |   |   | - |   |
| Pershing Square warrants granted/committed to May 21, 2010 |   |           | -      |   |           |   | - |   |   |   | 21.9 |   |   |   | - |   |
| Changes in fair value of LeBow warrants                    |   |           | (3.1   | )      |           |   | - |   |   |   | (29.5 | ) |   |   | - |   |
| Changes in fair value of Pershing Square warrants          |   |           | (2.9   | )      |           |   | (28.6 | ) |   |   | (5.7 | ) |   |   | 19.0 |   |
| Ending balance                                             |   | $              | 54.2   |   |           | $      | 24.0 |   |   | $ | 54.2 |   |   | $ | 24.0 |   |

----

|       Loss from continuing operations                            |   | $      | (37.7  | )      |
|------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
|       Add: Warrant income                                        |   | $      | (28.7  | )      |
|                                                                                           |   |   |   |   |
|          Adjusted Loss from continuing operations |   | $      | (66.4  | )      |

|                                                                                                                   |   |   |   |
|------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|       Basic weighted average common shares outstanding (in millions)                     |   |   | 60.1   |   |
|       Add: Dilutive impact of warrants outstanding                                       |   |   | 7.4    |   |
|          Diluted weighted average common shares outstanding (in millions) |   |   | 67.5   |   |
|                                                                                                                   |   |   |   |   |
|       Diluted loss from continuing operations                                            |   | $      | (0.98  | ) |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 13 Weeks Ended |   |   | 39 Weeks Ended |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|----------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | Oct. 30, 2010  |   |   | Oct. 31, 2009  |   |   | Oct. 30, 2010 |   |   | Oct. 31, 2009 |   |
| Sales                                                                                                       |   |           | 100.0  | %      |           |   | 100.0 | % |   |   | 100.0 | % |   |   | 100.0 | % |
| Other revenue                                                                                               |   |           | 1.0    |   |           |   | 1.1 |   |   |   | 0.9 |   |   |   | 1.2 |   |
|   Total revenue                                                                                   |   |           | 101.0  |   |           |   | 101.1 |   |   |   | 100.9 |   |   |   | 101.2 |   |
| Cost of merchandise sold (including occupancy costs)                                                                                                                                                                                                                                                                                                                                                                                        |   |           | 85.6   |   |           |   | 82.6 |   |   |   | 82.8 |   |   |   | 80.0 |   |
|   Gross margin                                                                                    |   |           | 15.4   |   |           |   | 18.5 |   |   |   | 18.1 |   |   |   | 21.2 |   |
| Selling, general and administrative expenses                                                                                                                                                                                                                                                                                                                                                                                                |   |           | 30.6   |   |           |   | 29.0 |   |   |   | 27.6 |   |   |   | 27.7 |   |
| Asset impairments and other writedowns                                                                                                                                                                                                                                                                                                                                                                                                      |   |           | -      |   |           |   | - |   |   |   | - |   |   |   | - |   |
|   Operating loss                                                                                  |   |           | (15.2  | )      |           |   | (10.5 | ) |   |   | (9.5 | ) |   |   | (6.5 | ) |
| Interest expense                                                                                            |   |           | 1.7    |   |           |   | 1.1 |   |   |   | 1.6 |   |   |   | 1.0 |   |
| Warrant/put expense (income)                                                                                |   |           | (1.3   | )      |           |   | (5.0 | ) |   |   | 1.4 |   |   |   | 1.9 |   |
|   Total interest expense (income)                                                                 |   |           | 0.4    |   |           |   | (3.9 | ) |   |   | 3.0 |   |   |   | 2.9 |   |
|   Loss before income tax                                                                          |   |           | (15.6  | )      |           |   | (6.6 | ) |   |   | (12.5 | ) |   |   | (9.4 | ) |
| Income taxes                                                                                                |   |           | 0.2    |   |           |   | - |   |   |   | 0.1 |   |   |   | 0.1 |   |
|   Loss from continuing operations                                                                 |   |           | (15.8  | )%     |           |   | (6.6 | )% |   |   | (12.6 | )% |   |   | (9.5 | )% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Store openings                                                                                              |   |           | -      |   |           |   | - |   |   |   | 1 |   |   |   | 1 |   |
| Store closings                                                                                              |   |           | 5      |   |           |   | 9 |   |   |   | 13 |   |   |   | 28 |   |
| Store count                                                                                                 |   |           | 674    |   |           |   | 877 |   |   |   | 674 |   |   |   | 877 |   |

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|   | 2.1    | (1)    | Agreement for the sale and purchase of the entire issued share capital of Paperchase Products Limited among BGP (UK) Limited, Borders Superstores (UK) Limited Borders Group, Inc. and Newincco 1015 Ltd. dated as of July 13, 2010 (excluding certain schedules and appendices referred to in the agreement, which the registrant agrees to furnish supplementally to the Securities and Exchange Commission upon request). |
|--------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 3.1    | (2)    | Restated Articles of Incorporation of Borders Group, Inc.                                                                                                                                                                                                                                                                                                                                                                                   |
|   | 3.2    | (3)    | Amendment to the Restated Articles of Incorporation of Borders Group, Inc.                                                                                                                                                                                                                                                                                                                                                                  |
|   | 3.3    | (4)    | Restated bylaws of Borders Group, Inc.                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | 3.4    | (5)    | First Amendment to the Restated By laws of Borders Group, Inc.                                                                                                                                                                                                                                                                                                                                                                              |
|   | 3.5    | (3)    | Second Amendment to the Restated By laws of Borders Group, Inc.                                                                                                                                                                                                                                                                                                                                                                             |
|   | 3.6    | (6)    | Third Amendment to the Restated By laws of Borders Group, Inc.                                                                                                                                                                                                                                                                                                                                                                              |
|   | 3.7    | (7)    | Fourth Amendment to the Restated By laws of Borders Group, Inc.                                                                                                                                                                                                                                                                                                                                                                             |
|   | 10.8   |   | Second Amendment to the Amended and Restated Borders Group, Inc. 2004 Long-Term Incentive Plan.                                                                                                                                                                                                                                                                                                                                             |
|   | 31.1   |   | Statement of Bennett S. LeBow, Chairman and Chief Executive Officer of Borders Group, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                        |
|   | 31.2   |   | Statement of Scott D. Henry, Executive Vice President and Chief Financial Officer of Borders Group, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                          |
|   | 32.1   |   | Statement of Bennett S. LeBow, Chairman and Chief Executive Officer of Borders Group, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                        |
|   | 32.2   |   | Statement of Scott D. Henry, Executive Vice President and Chief Financial Officer of Borders Group, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                          |
|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | (1     | )      | Incorporated by reference from the Company’s Current Report on Form 8-K dated July 13, 2010 (File No. 1-13740).                                                                                                                                                                                                                                                                                                                       |
|   | (2     | )      | Incorporated by reference from the Company’s Annual Report on Form 10-K dated January 24, 1999 (File No. 1-13740).                                                                                                                                                                                                                                                                                                                    |
|   | (3     | )      | Incorporated by reference from the Company’s Current Report on Form 8-K dated May 25, 2007 (File No. 1-13740).                                                                                                                                                                                                                                                                                                                        |
|   | (4     | )      | Incorporated by reference from the Company’s Annual Report on Form 10-K dated January 24, 2001 (File No. 1-13740).                                                                                                                                                                                                                                                                                                                    |
|   | (5     | )      | Incorporated by reference from the Company’s Current Report on Form 8-K dated July 13, 2006 (File No. 1-13740).                                                                                                                                                                                                                                                                                                                       |
|   | (6     | )      | Incorporated by reference from the Company’s Current Report on Form 8-K dated October 2, 2007 (File No. 1-13740).                                                                                                                                                                                                                                                                                                                     |
|   | (7     | )      | Incorporated by reference from the Company’s Current Report on Form 8-K dated January 17, 2008 (File No. 1-13740).                                                                                                                                                                                                                                                                                                                    |

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| Date:    December 9, 2010 | By:/s/ SCOTT D. HENRY |
|-----------------------------------------------|-----------------------|

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