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Borders Group Inc.'s (BGP) fiscal second-quarter loss widened sharply on restructuring charges as the bookseller made operational changes that hurt short-term sales, although the company's turnaround appears to be making progress.

The most recent period was one of transition as the company made big changes in reducing space and inventory, said Chief Executive Ron Marshall in a statement.

Marshall acknowledged the recession is not the only cause of the company's woes, saying he has "a laundry list" of changes to make, like more promotions and crisper in-store operations to improve sales.

Investors appear to be responding, with shares recently up 7.8% to $3.99 in premarket trading.

The second-largest bookstore chain in the U.S. behind Barnes & Noble Inc. (BKS) has cut its inventory and capital expenditures because of weak consumer spending.

For the quarter ended Aug. 1, Borders posted a loss of $45.6 million, or 76 a share, compared with a loss of $9.2 million, or 19 cents a share, a year earlier. The latest results included 55 cents a share in restructuring and other charges.

Revenue decreased 18% to $624.7 million. Same-store sales at U.S. Borders superstores decreased 17%, while the figure fell 23% at the mall-based Waldenbooks segment, which the company has been shrinking. International sales rose 10% excluding currency changes.

Gross margin fell to 22.9% from 24%.

Borders shares have soared from their Christmas Eve low of 34 cents but remain 30% below prior-year levels

-By Karen Talley, Dow Jones Newswires; 212-416-2196

(Joan E. Solsman contributed to this article.)