Despite 'Hallows,' Booksellers Still Cautious

Sales of Harry Potter and the Deathly Hallows provided the expected lift to second-quarter sales at Barnes & Noble and Books-A-Million, but it was difficult to determine if the increase in the period was anything more than a temporary uptick in what has been a sluggish retail book sales environment. In a conference call discussing the second quarter, B&N CEO Steve Riggio said he didn't want to forecast how the second half of the year will turn out. While the fall list looks strong, Riggio said it will be up to the customers to determine just how appealing the lineup actually is. B&N is predicting that comp sales through its stores will be flat to up in low single digits in the third quarter, and will be flat to slightly positive for the full year.

BAM doesn't give guidance on future sales, and president Sandy Cochran limited her remarks to observing that there are a number of potential big titles coming out in the fall, including books by Nicholas Sparks, John Grisham, Alice Sebold and Stephen Colbert.

Perhaps the most surprising aspect of B&N's performance was the strong sales reported by Barnes & Noble.com, where sales were up 17.9%, to $97.5 million. B&N.com CEO Marie Toulantis said the improvement was due to higher traffic and higher conversion rates, which she attributed primarily to the demand for Hallows (B&N.com sold 400,000 copies, while the stores sold 1.7 million). Hallows “drove more people to the site,” Toulantis said.

Commenting on the sales track of Hallows, Riggio said that after a record-breaking start, sales “trailed off quite a bit.” Still, he predicted that B&N will sell hundreds of thousands of additional copies over the remainder of the year, and said the entire series will remain a backlist fixture for years to come.

During the call, B&N also announced that the number of new store openings would finish the year between 30 and 35, down slightly from earlier projections of 35 to 40. Chief operating officer Mitchell Klipper said the delay was due to nothing more than the company waiting for the right locations to become available. He said that despite the recent credit squeeze, commercial real estate development remains robust. In the second quarter, B&N opened four superstores and closed two, bringing the total to 698. The retailer also shut another three Dalton outlets, dropping the number of stores to 94.