Proclaiming that it has been a leader in the growth of superstores as well as in e-commerce, Barnes & Noble said in its just-released annual report that it intends “to preside over the next big explosion of content—the marriage of low-cost publishing technology with the Internet.” The report stated that “we’re entering an age where the distinction between publisher, author and bookseller will blur. Some authors will write their books online and sell directly to their readers. Some publishers will sell directly to consumers. And some online booksellers will become publishers.” The report added that in the not-too-distant future a customer will wait “while we print your book, burn your CD or fill your e-book reader with content—our content or that of a third-party publisher.”
To help prepare for the future, B&N retains a 29% stake in iUniverse.com, and the company reported that its share of iUniverse’s loss last year was $9.3 million. B&N also reported a $127,000 loss on its investment in Book magazine. B&N acquired roughly a 50% stake in Book during the year, for $4.8 million. In another investment in fiscal 2001, B&N spent $11 million to acquire a controlling interest in Calendar Club. Calendar Club contributed $66.3 million and an operating profit of $1.4 million to B&N’s bookstore division last year.
Looking at the current year, B&N said it expects to spend between $150 million and $170 million to open 40 to 45 new bookstores as well as 75 new video and entertainment stores. Its capital expenditures in fiscal ’01 were $134.3 million when it opened 32 superstores.