Barnes and Noble 2001 Annual Report Download - page 9

2 0 0 1 A n n u a l R e p o r t ■B a r n e s & N o b l e , I n c . 9
M A N AGEMENT’S DISCUSSION AND
A N A LYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERAT I O N S
The Company’s fiscal year is comprised of 52 or 53
weeks, ending on the Saturday closest to the last day
of January. As used in this section, “fiscal 2001”
represents the 52 weeks ended February 2, 2002, “fiscal
2000” represents the 53 weeks ended February 3, 2001
and “fiscal 1999” re p resents the 52 weeks ended
January 29, 2000.
GENERAL
B a r nes & Noble, Inc. (Barnes & Noble or the Company),
the nation’s largest bookseller1, as of Febru a ry 2, 2002
operates 896 bookstores and 1,038 video-game and
e n t e rt a i n m e n t - s o f t w a re stores. Of the 896 bookstore s ,
591 operate under the Barnes & Noble Booksellers,
Bookstop and Bookstar trade names (40 of which were
opened in fiscal 2001) and 305 operate under the
B. Dalton Bookseller, Doubleday Book Shops and
S c r i b n e r ’s Bookstore trade names. Through its
a p p roximate 36 percent interest in barn e s a n d n o b l e . c o m
llc (Barnes & Noble.com), the Company is one of the
l a r gest sellers of books on the Internet. The Company,
t h rough its acquisitions of Babbage’s Etc. LLC (Babbage’s
Etc.) and Funco, Inc. (now known as GameStop, Inc.),
is the nation’s largest video-game and PC-entertainment
software specialty retailer, operating 1,038 video-game
and entertainment-software stores under the GameStop,
Babbage’s, Software Etc. and FuncoLand trade names,
a Web site, gamestop.com, and Game Informer, one of
the largest multi-platform video-game magazines, with
circulation of over 415,000 subscribers. The Company
employed approximately 45,000 full- and part-time
employees as of February 2, 2002.
Barnes & Noble is the nation’s largest operator of
bookstores1with 591 Barnes & Noble bookstores
located in 49 states and the District of Columbia as
of Febru a ry 2, 2002. With more than 35 years of
bookselling experience, management has a strong sense
of customers’ changing needs and the Company leads
book retailing with a “community store” concept.
B a r nes & Noble’s typical bookstore offers a
comprehensive title base, a café, a children’s section, a
music department, a magazine section and a calendar of
ongoing events, including author appearances and
c h i l d re n ’s activities, that make each Barnes & Noble
bookstore an active part of its community.
Barnes & Noble bookstores range in size from 10,000
to 60,000 square feet depending upon market size,
and each store features an authoritative selection of
books, ranging from 60,000 to 200,000 titles. The
comprehensive title selection is diverse and reflects local
interests. In addition, Barnes & Noble emphasizes
books published by small and independent publishers
and university presses. Bestsellers re p resent only
t h ree percent of Barnes & Noble bookstore sales.
Complementing this extensive on-site selection, all
Barnes & Noble bookstores provide customers with
access to the millions of books available to online
shoppers while offering an option to have the book
sent to the store or shipped directly to the customer.
All Barnes & Noble bookstores are equipped with
the BookMaster in-store operating system, which
enhances the Company’s merc h a n d i s e - re p l e n i s h m e n t
system, resulting in higher in-stock positions and better
p r oductivity at the store level through efficiencies in
receiving, cashiering and re t u rns pro c e s s i n g .
During fiscal 2001, the Company added 0.8 million
square feet to the Barnes & Noble bookstore base,
bringing the total square footage to 14.2 million square
feet, a six percent increase over the prior year. Barnes &
Noble bookstores contributed approximately 90 perc e n t
of the Company’s total bookstore sales in fiscal 2001.
The Company plans to open between 40 and 45 Barnes
& Noble bookstores in fiscal 2002, which are expected
to average 26,000 square feet in size.
At the end of fiscal 2001, the Company operated 305
B. Dalton bookstores in 45 states and the District of
Columbia. B. Dalton bookstores employ merchandising
strategies that target the “Middle American” consumer
book market, offering a wide range of bestsellers and
general-interest titles. Most B. Dalton bookstores range
in size from 2,000 to 6,000 square feet, and while they
are appropriate to the size of adjacent mall tenants, the
opening of superstores in nearby locations continues
to have a significant adverse impact on B. D a l t o n
bookstores.
The Company is continuing to execute a strategy to
maximize re t u rns from its B. Dalton bookstores in
response to declining sales attributable primarily to
1Based upon sales reported in trade publications and public filings.