BN.com Sales Slow, But Losses Fall
E-retailer still expects year-end sales to top $420 million
Jim Milliot -- Publishers Weekly, 8/6/2001
The slowing growth rate of online booksellers reflected in Amazon.com's figures for the second quarter was also seen at Barnes & Noble.com, where sales for the period ended June 30, 2001, rose 2.9% to $83.7 million. Marie Toulantis, president of BN. com, said one reason for the slowing growth rate was a decline in sales to corporate accounts through its Fatbrain unit. Excluding the corporate side, sales to consumers were up 8% in the quarter.
The elimination of promotional discounting for acquiring new customers also played a role in slowing sales, but the tactic helped to shrink the e-retailer's losses in the quarter. The company's net loss fell to $38.4 million from $57.1 million in last year's second quarter. Operating expenses in the quarter fell 21%, to $60.6 million, and BN.com vice-chairman Steve Riggio said expenses will continue to decline.
The company is expecting sales for the third quarter to be in the $95-million to $105-million range, compared to sales of $91 million in last year's third period. The BN.com executives said they expect growth in the second half of the year to be led by sales to consumers, with some improvement in corporate sales. The company continues to predict that sales for the full year will be between $420 million and $475 million. Riggio observed that Internet counters at all Barnes & Noble superstores should be operational this fall. More integration with the superstores is planned for 2002, Riggio said.
Riggio indicated that BN.com has no intention of meeting Amazon's new pricing promotion, which offers a 30% discount on books over $20. Riggio said BN.com believes the lower prices won't generate enough additional sales to offset the price reduction. He estimated that Amazon's new strategy would cost the company more than $100 million in sales on an annual basis. "That's something that's not very prudent to do," Riggio said.
For the first six months of the year, sales were up 13.5% to $192.7 million, and the net loss fell to $78.4 million from $114.7 million in the first half of 2000.
