Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
The retailer expects web sales to reach about $1 billion in FY 2011.
Bookseller Barnes & Noble Inc. sees the future, and it’s clearly online—a fact underscored in the retailer’s fiscal 2010 year-end financial results. In fact, after growing nicely in fiscal 2010, Barnes & Noble expects web sales to grow 75% in fiscal 2011, which would translate to just over $1 billion. In comparison Barnes & Noble projects comparable-store sales will remain flat or increase by 3% while total sales will increase 20% to 25%.
“The explosive growth of digital books has created the most compelling opportunity in Barnes & Noble’s history,” says chairman Leonard Riggio. “We have found that Barnes & Noble members, our best customers, have increased their combined physical and digital spend with us by 17% since purchasing a Nook. Based on our assessment of the future digital landscape, I am confident that we have the right strategy and management team to drive Barnes & Noble’s next phase of growth and development.”
Barnes & Noble, which switched its year-end reporting period to May after acquiring Barnes & Noble College Booksellers in October, for the fiscal year ended May 1 also recorded:
- An increase in e-commerce revenue of 24.0% to $573 million from $462 million in fiscal 2009. E-commerce sales include revenue from Barnes & Noble’s Nook business and related digital content, but the retailer didn’t separate that revenue from sales at BN.com.
- Year-over-year growth in total sales of 13.5% to $5.81 billion from $5.12 billion. Total sales include post-acquisition revenue from Barnes & Noble College Booksellers of about $836 million.
- Barnes & Noble comparable-store sales decreased 4.8%, while college bookstore same-store sales decreased 0.3%.
- Consolidated net earnings were $36.67 million compared with $75.92 million in fiscal 2009.
“In light of the exciting digital opportunity before us, we are planning to redirect a significant portion of our financial resources towards investments in technology, sales and marketing,” says CEO William Lynch. “These investments will impact our bottom line in 2011, but we believe they will enable Barnes & Noble to capitalize on the significant mid-to-long-term growth opportunities presented by the digital markets.”
Internet Retailer calculates e-commerce accounted for 9.9% of total sales compared with 9% in fiscal 2009.
Barnes & Noble, No. 42 in the Internet Retailer Top 500 Guide, has spent much of the past fiscal year transforming itself from a traditional chain retailer into a more focused e-commerce and digital media company. In October, Barnes & Noble introduced its Nook electronic book reader and, in March, it promoted Lynch, the president of BarnesandNoble.com, to CEO.
Higher e-commerce sales also are reflected in the retailer’s fourth quarter numbers:
- E-commerce sales increased 51.0% to $141 million from $93.4 million in the fourth quarter of fiscal 2009.
- Total sales increased 18.9% to $1.32 billion from $1.11 billion.
- Net loss was $32.03 million compared with a net loss of $2.69 million in the fourth quarter of fiscal 2009.
- Barnes & Noble comparable-store sales decreased 3.1%, while college bookstore same-store sales in increased 2.9%.
“We are pleased that in the fourth quarter each of our three channels of business have all gained significant share: physical bookstores, digital books and books sold online at BN.com,” says Lynch. “In fact, in just a brief 12 months since we launched the e-book store, our share of the digital market already exceeds our share of the retail book market.”
Internet Retailer calculates e-commerce accounted for 10.7% of total sales compared with 8.5% in fiscal 2009.