Crown expects to emerge from Chap. 11 in fall
Sales at the nation's four largest bookstore chains rose 8.7% to $1.46 billion for the first quarter ended April 30. The sales gain was well below the 13.2% increase posted in last year's first quarter, but was an improvement over the 6.2% gain recorded in the fourth quarter of fiscal 1999.
Although it had the worst performance in the period, with sales down nearly 38% to $41 million, Crown's result were somewhat offset by the news that the company expects to emerge from bankruptcy by the fall. Crown president Anna Currence told PW that she expects to file a reorganization plan with the bankruptcy court by the end of the month. If all g s well, Currence anticipates that Crown will emerge from bankruptcy in September as a stand-alone public company. Under the current plan, Currence expects all 92 existing stores to remain part of the company.
The largest sales increase in the first quarter was posted by Books-A-Million, which attributed its 14.2% jump to improved comparable-store sales as well as to new stores. At the two biggest chains, top-ranked Barnes &Noble posted a 9.3% sales gain, while Borders Group had a 12.8% increase.
The revenue gains at B&N and Borders were led by higher superstore sales that offset declines in their mall-based outlets. B&N had 521 superstores at the end of the quarter, and Borders had 262.
With the first quarter behind it, B&N last week announced a number of special charges it will be taking in the second quarter. Since the valuation of the barnesandnoble.com public offering exceeded Bertelsmann's basis in its investment, the German conglomerate has paid B&N $25 million, which the bookstore chain will record as a pretax gain of $25 million. In addition, B&N anticipates that it will receive about $20 million from its sale of 1 million shares of Chapters stock (News, June 7), and will recognize a pretax gain of about $10 million.
The funds received from Bertelsmann and Chapters will more than offset a $5 million pretax charge B&N will take in the quarter to cover costs associated with its failed bid to acquire the Ingram Book Group.
