Barnes and Noble 2011 Annual Report Download - page 15

their personal Barnes & Noble digital library on devices
including iPad™, iPhone®, Android™ smartphones and
tablets, BlackBerry® and other smartphones, as well as
most laptops or full-sized desktop computers. The Lifetime
Library™ helps ensure that Barnes & Noble customers will
always be able to access their digital libraries on NOOK™
products and software-enabled devices and BN.com. The
Company also off ers NOOK Newsstand™, which provides
an extensive selection of digital newspapers and magazines,
available in both subscription and single copy format,
NOOK Kids™, a collection of digital picture and chapter
books for children and NOOK Study™, an innovative study
platform and software solution for higher education.
As digital and electronic sales become a larger part of its
business, the Company believes its footprint of more than
1,300 stores will continue to be a major competitive asset.
The Company plans to integrate its traditional retail, trade
book and college bookstores businesses with its electronic
and internet off erings, using retail stores in attractive
geographic markets to promote and sell digital devices and
content. Customers can see, feel and experiment with the
NOOK™ in the Company’s stores.
Although the stores will be just a part of the off ering,
they will remain a key driver of sales and cash fl ow as the
Company expands its multi-channel relationships with
its customers. The Company does not expect to open retail
stores in new geographic markets or expand the total num-
ber of retail stores in the near future.
B&N College provides direct access to a large and well-
educated demographic group, enabling the Company to
build relationships with students throughout their college
years and beyond. The Company also expects to be the ben-
efi ciary of market consolidation as more and more schools
outsource their bookstore management. The Company is in
a unique market position to benefi t from this trend given
its full suite of services: bookstore management, textbook
rental and digital delivery.
Although the Company believes cash on hand, cash fl ows
from operating activities, funds available from its senior
credit facility and short-term vendor fi nancing provide the
Company with adequate liquidity and capital resources for
seasonal working capital requirements, the Company may
raise additional capital to support the growth of its online
and digital businesses.
Strategic alternative process. On August 3, 2010, the
Company’s Board of Directors created a Special Committee
to review strategic alternatives, including a possible sale of
the Company. On May 19, 2011, the Company announced
that the Special Committee received a proposal from
Liberty Media to acquire the Company. There can be no
assurance that any defi nitive off er to acquire the Company
will be made, or if made what the terms thereof will be,
or that this or any other transaction will be approved or
consummated. Moreover, there can be no assurance that
the Special Committee’s review of strategic alternatives will
result in a sale of the Company or in any other transaction.
52 WEEKS ENDED APRIL 30, 2011 COMPARED WITH
52 WEEKS ENDED MAY 1, 2010
Sales
The following table summarizes the Company’s sales for the
52 weeks ended April 30, 2011 and May 1, 2010:
52 weeks ended
Dollars in thousands
April 30,
2011 % Total May 1, 2010 % Total
B&N Retail $ 4,364,246 62.3% $ 4,401,343 75.7%
B&N College 1,776,223 25.4% 833,648 14.4%
B&N.com 858,096 12.3% 572,763 9.9%
Total Sales $ 6,998,565 100.0% $ 5,807,754 100.0%
The Company’s sales increased $1.19 billion, or 20.5%,
during fi scal 2011 to $6.99 billion from $5.81 billion during
fi scal 2010. The increase or (decrease) by segment is as
follows:
• B&N Retail sales for fi scal 2011 decreased $37.1 million,
or 0.8%, to $4.36 billion from $4.40 billion during fi scal
2010, and accounted for 62.3% of total Company sales.
This decrease was primarily attributable to closed stores
that decreased sales by $93.3 million off set by a 0.7%
increase in comparable store sales, which increased sales
by $29.1 million, and new Barnes & Noble stores that
contributed to an increase in sales of $25.0 million. The
0.7% increase in comparable sales was primarily due to
the strong sales of digital products and the expansion
into areas such as Toys & Games off set by the decline in
trade books. B&N Retail also includes third-party sales of
Sterling Publishing Co., Inc.
• B&N College sales increased $942.6 million, or 113.1%,
to $1.78 billion during fi scal 2011 from $833.6 million
during fi scal 2010. This increase in sales was due to the
Acquisition on September 30, 2009. Comparable sales
for B&N College decreased 0.8% during fi scal 2011. This
decrease in comparable sales was primarily due to lower
textbook and trade book sales off set by higher general
merchandise sales.
• B&N.com sales increased $285.3 million, or 49.8%,
to $858.1 million during fi scal 2011 from $572.8 mil-
lion during fi scal 2010. Comparable sales for B&N.com
increased 64.7% in fi scal 2011. This increase in sales was
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