January 19, 2001, 12:00 AM

BN Reports Loss, Despite Increases In Sales, Customers

Don Davis

Editor in Chief

Barnesandnoble.com has reported a higher-than-forecast net loss of $67.3 million for second-quarter 2000, versus a net loss of $57.5 million for second-quarter 1999. Sales for second-quarter 2000 were $67.4 million, an increase of 77% from $38.2 million for second-quarter 1999. Expenses were higher than anticipated for the quarter and are expected to continue to run higher for the next quarter due to the number of initiatives implemented and planned by the New York City-based company, it says.

Barnesandnoble.com added more than 700,000 new customers during the second quarter, raising the cumulative customer count to more than 5.5 million as of late June, an increase of 39% from the year-end 1999 total. Repeat customer orders reached 70% in the second quarter, a significant increase from 61% a year ago, reflecting increased customer loyalty.

``We are optimistic that sales for the remainder of this year will more than make up for the second-quarter shortfall from the record number of initiatives we rolled out,'' says Marie Toulantis, chief financial officer. ``While increased demand in the market caused us to accelerate our development and increase our investments, we believe that together these initiatives put us in a very strong position to achieve our objectives and that the short-term costs will yield substantial return on our investments.''

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