Barnes and Noble 2007 Annual Report Download - page 9

Barnes & Noble, Inc.’s (Barnes & Noble or the Company)
fi scal year is comprised of 52 or 53 weeks, ending on the
Saturday closest to the last day of January. As used in this
section, “fi scal 2008” represents the 52 weeks ending
January 31, 2009, “fi scal 2007” represents the 52 weeks
ended February 2, 2008, “fi scal 2006” represents the 53
weeks ended February 3, 2007 and “fi scal 2005” repre-
sents the 52 weeks ended January 28, 2006.
GENERAL
The Company is the nation’s largest bookseller1, and as
of February 2, 2008 operated 798 bookstores and a web-
site. Of the 798 bookstores, 713 operate primarily under
the Barnes & Noble Booksellers trade name (31 of which
were opened in fi scal 2007) and 85 operate primarily
under the B. Dalton Bookseller trade name. Barnes &
Noble conducts the online part of its business through
barnesandnoble.com llc (Barnes & Noble.com), one
of the largest sellers of books on the Internet. Through
Sterling Publishing Co., Inc. (Sterling Publishing), the
Company is a leading general trade book publisher.
Additionally, the Company owns an approximate 74%
interest in Calendar Club, L.L.C. (Calendar Club), an
operator of seasonal kiosks. The Company employed
approximately 40,000 full- and part-time employees as
of February 2, 2008.
Barnes & Noble stores are located in all 50 states and
the District of Columbia as of February 2, 2008. With
over 40 years of bookselling experience, management
has a strong sense of customers’ changing needs and the
Company leads book retailing with a “community store”
concept. Barnes & Noble’s typical store off ers a compre-
hensive title base, a café, a children’s section, a music/
DVD department, a magazine section and a calendar of
ongoing events, including author appearances and chil-
dren’s activities, that make each Barnes & Noble store an
active part of its community.
1 Based upon sales reported in trade publications and public fi lings.
Barnes & Noble stores range in size from 10,000 to
60,000 square feet depending upon market size with
an overall average store size of 26,000 square feet.
Each store features an authoritative selection of books,
ranging from 60,000 to 200,000 unique titles. The
comprehensive title selection is diverse and tailored to
each store location to refl ect local interests. In addition,
Barnes & Noble emphasizes books published by small
and independent publishers and university presses.
Bestsellers (the “top ten” highest selling hardcover
fi ction, hardcover non-fi ction and trade paperback
titles) typically represent between 3% and 5% of Barnes
& Noble store sales. Complementing this extensive
in-store selection, all Barnes & Noble stores provide
customers with on-site access to the millions of books
available to online shoppers while off ering an option to
have the book sent to the store or shipped directly to the
customer through Barnes & Noble.com’s delivery system.
All Barnes & Noble stores are equipped with its pro-
prietary BookMaster in-store operating system, which
enhances the Company’s merchandise-replenish-
ment system, resulting in high in-stock positions and
productivity at the store level through effi ciencies in
receiving, cashiering and returns processing. The
Company has integrated, and is continuing to integrate,
the BookMaster system used in its stores with Barnes &
Noble.com so that its customers share the same experi-
ence across both channels.
During fi scal 2007, the Company added 0.7 million
square feet to the Barnes & Noble store base, bringing
the total square footage to 18.2 million square feet, a
4% increase over the prior year. Barnes & Noble stores
contributed approximately 86% of the Company’s total
sales in fi scal 2007. The Company plans to open between
35 and 40 Barnes & Noble stores in fi scal 2008, which
are expected to average 30,000 square feet in size.
At the end of fi scal 2007, the Company operated 85
B. Dalton bookstores in 33 states and the District of
Columbia. B. Dalton bookstores employ merchandising
strategies that target the mainstream consumer book
market, off ering 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
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
2007 Annual Report 7