# EXHIBIT 99.1

# BORDERS
GROUP, INC.

# CAUTIONARY
STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION

# REFORM ACT OF
1995SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

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

|- | consumer demand for the Companys products, particularly during the holiday
season, which is believed to be related to a number of factors, including
general economic conditions and overall consumer spending patterns, weather
conditions and, with respect to the mall business, overall mall traffic;
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|- | an unexpected increase in competition, including Internet competition and
competition resulting from electronic or other alternative methods of delivery
of books, music, videos and other products to consumers, or unanticipated margin
or other disadvantages relative to our competitors;
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|- | the continued availability of adequate capital to fund the Companys
operations, including (i) the Companys ability to replace on satisfactory
terms its current revolving credit facility, which expires in October, 2002, and
(ii) the availability of satisfactory financing for Borders superstores,
including permanent financing for properties that have been temporarily financed
through the Companys lease financing facility;
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|- | the timing and amount of insurance recoveries relating to the former Borders store at the World Trade Center;
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|- | uninsured  losses  from  risks such as  terrorism,  earthquakes  or floods for which no, or  limited,  insurance  coverage  is
maintained;
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|- | higher than anticipated interest, occupancy, labor, distribution and inventory shrinkage costs;
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|- | energy shortages or higher than anticipated energy costs;
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|- | unanticipated adverse litigation expenses or results;
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|- | unanticipated work stoppages;
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|- | higher than anticipated costs associated with the closing of under performing stores;
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|- | unanticipated increases in the cost of the merchandise sold by the Company;
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|- | the performance of the Company's strategic initiatives, including the Internet and international expansion;
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|- | the stability and capacity of the Company's information systems;
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|- | unanticipated costs or problems relating to the informational technology systems required for the operations of the Company'
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|- | changes in foreign currency exchange rates; and
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|- | the continued ability of the Company to locate and develop suitable sites for its superstore expansion and kiosk programs.
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The Company does not undertake any obligation to update forward-looking statements.