The CD format showed to be of waning importance for Borders as the company issued a press release for its Q1 2008 results. Music sales dropped 25.8% versus the previous year. The company attributed the decline to negative sales trends as well as a planned reduction of inventories. No data was given for same-store results in the music category. The filing does indicate there were no closings of Borders stores during the quarter (14 Waldenbooks stores were closed during the period), so it is likely same-store sales represent all or nearly all of the 25.8% drop in music sales.

Borders' same-store music sales dropped 13.1% in Q3 2007, 14.2% for fiscal 2007 and 15.1% in fiscal 2006.

The company is attempting to reshape its digital footprint, though I'd bet music companies are not likely to feel much difference. Yesterday Borders announced it has stopped outsourcing its online store to Amazon.com and re-opening its own online storefront. In addition, Borders is testing concept stores that will have digital centers where customers can download music and books, research family histories and print photos.