Barnes and Noble 2000 Annual Report Download - page 7

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key initiatives, including the purchase of Funco. We further bolstered our balance sheet with our successful
completion of a $300 million convertible subordinated note offering in March.
However, our physical stores tell only part of the Barnes & Noble multi-channel story. In 2000, we announced
a number of initiatives to integrate our retail operations and to deliver to our customers whatever information
content they desire, in whatever format they want, through whatever channel they choose. These initiatives include
our Internet Service Counters, a membership program called Readers’ Advantage and a new returns policy.
Barnes & Noble.com — in which Barnes & Noble, Inc. holds a 36 percent stake — reported a 65 percent surge in
sales to $320 million for its fiscal year ended December 31, 2000. Their gross margin showed significant
improvement throughout the year, increasing from 19.4 percent in the first quarter, to 21.1 percent in the fourth
quarter of 2000. In 2000, Barnes & Noble.com substantially completed its investments in technology development
and infrastructure, as well as the build-out of its distribution network, and is now poised to narrow its losses as it
leverages these investments.
Our position has always been that if we pay a visit to our customers at home through Barnes & Noble.com,
they will return the favor at our stores. The book lovers who flocked to both our stores and our Web site in
2000 confirmed our thesis, driving revenues up in both channels. We are creating a truly seamless, convenient
and full-service “book” buying
network
, one that will continue to deliver superior value not only to our
customers, but also to our shareholders.
5
Barnes & Noble store in the Lansing Mall, Lansing, Michigan.