Riggio: Brick and Mortar Bookstores Still Fundamental
Jim Milliot -- Publishers Weekly, 5/17/1999
In his letter to shareholders accompanying Barnes &Noble's annual report, company chairman Len Riggio observed that although the World Wide Web will become a major component of the future of book publishing and bookselling, "we believe retail bookstores will remain the foundation of our industry." Riggio added that "more and more we view Barnesandnoble.com as the broadcast channel for the company, and the Barnes &Noble stores as the portal through which our e-commerce business will be nourished."The company plans to spend between $100 million and $120 million this year on opening approximately 50 superstores as well as rolling out its BookMaster operating system to all outlets. (The investment figure d s not include investment in Barnesandnoble.com). BookMaster, which is currently in use in about 25% of B&N stores, gives customers access to all the titles available to the chain's online shoppers, with the option of in-store or home delivery.
Reviewing results from fiscal 1999, B&N said the 8% increase in revenues (News, Mar. 1) was led by strong gains in the health and fitness, history and education categories. In addition, the cafe, music, gift and children's departments did particularly well. During the year, B&N stores sold more than 200 million books, with bestsellers accounting for 3%-4% of sales.
The past fiscal year also saw B&N expand its proprietary publishing program, especially its trade and children's line, according to B&N's 10-K filing. The bookstore chain currently has the rights to more than 2000 titles. The company acquires the titles directly from domestic and international publishers and from literary agents, commissions books directly from authors, reprints titles in the public domain and creates collections using in-house editors. The Barnes &Noble Books titles are "featured prominently in the company's direct-mail catalogue, in the front of the company's stores and on the Barnesandnoble.com Web site," the filing noted.
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The company's annual report also noted that Barnesandnoble.com will be adding music and video "superstores" to its site. A spokesperson said music will be added this summer, and the e-retailer expects video to be added later in the year.
Barnesandnoble.com also stands to gain some extra funding once its public offering is made. According to the annual report, Bertelsmann has agreed to invest $50 million in the company once the IPO is completed.
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