Barnes and Noble 2000 Annual Report Download - page 5

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3
Thus, “whisper numbers”
replaced real numbers,
“sales trends” replaced sales,
“earnings visibility” (I can see
it from here) replaced profits,
and the term “operating profit”
itself disintegrated into mysterious and heretofore
unknown subsets, such as “quarterly, projected,
divisional operating profit.”
Fortunately, reality has hit home; the whoosh we hear
is the sound of investors scurrying to buy stocks in
companies with solid earnings and, yes, future earnings
visibility. Amazingly, retail analysts who recently were
assigned to the Siberian outposts of the investment
community have been rediscovered as voices of reason,
even wisdom.
Yes, the retail business is back in full motion and color,
and the business of bookselling continues to grow
at a strong pace. More importantly, Barnes & Noble’s
business is growing faster than that of the industry
and faster than most of the major retailers in America.
Our “super” stores again achieved industry-leading
comparable sales increases of 5 percent, while, at the
same time, our dot com sales increases were more
than 65 percent year-over-year. So where, pray tell,
was the so-called “cannibal” in the system? Perhaps,
we submit, this can be explained by the fact that
Barnes & Noble.com is actually helping our retail
franchise by hand-selling specific titles in ways
our local bookstores cannot possibly duplicate.
Also, remember that the
site is selling the very ideal
that books offer solutions to
everyday problems. Especially,
books at Barnes & Noble.
This broadcast channel, as we
call it, operates 24 hours a day, 365 days each year.
The future, we believe, will prove that retail and
e-commerce are not mutually destructive propositions.
Neither is going away. Great merchants with great
consumer franchises will offer their customers the best
of all possibilities. They will be seamlessly integrated,
because their customers require it and because their
shareholders will benefit from the long-range value
of the sophisticated delivery mechanisms that have
been created.
For Barnes & Noble, which exists on the cutting edge
of the information revolution, the future could not
be brighter. Our store systems are fully developed and
deployed. Our retail distribution systems, including
an awesome direct-to-consumer network is in place.
Most of the capital spending is behind us.
All that remains is creatively exploiting the existing
network we have established. We look forward to
the challenges and profitable opportunities tomorrow
will bring.
Leonard Riggio
Chairman & Chief Executive Officer