Barnes and Noble 2011 Annual Report Download - page 4

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A lthough the book industry has certainly been challenged during the past
twelve months, Barnes & Noble has had a remarkable year. Led by our world-
class bookstores, we have emerged as a major player in the explosively growing
e-content marketplace by selling millions of digital readers and in securing
millions of readers who hold their digital content in “lockers” we provide. In
the less than two years since we launched our award winning NOOK™, we have
transformed our company from being the nation’s largest retail bookseller, into
one of the world’s fastest growing providers of digital content.
The numbers speak for themselves as our share of the U.S. e-Book market grew
to 27% in just eighteen months, as compared to our 19% share of the physical
book marketplace. And, while booksellers the world over suff ered sales declines,
our comparable sales increased by almost 1% due to sales of digital products
and the expansion of our Toys & Games department. On top of this, BN.com
comparable sales increased by 65% for the year, led by our rapidly growing
e-content business. Thus, we have been able to secure our important standing in
retail bookstores and create a large back-end for our business as well. We could
not be more excited.
Since the onset of the digital revolution, many investors have expressed concerns
about the eff ect e-Books would have on the nation’s bookstores, including
Barnes & Noble. Would we survive, and if we did, how many stores would we be
able to keep open and how much profi t would they generate? While we shared
these concerns, we focused as well on the enormous potential of the e-content
marketplace and how we could profi t from it. Now having completed our fi rst full
year in this new paradigm, we see potential far beyond what was obvious to us
before, and we believe compelling enough for investors to sit up and take notice.
Total company sales grew by 5%, without the addition of Barnes & Noble College
Booksellers. With College, total company sales grew to $7 billion, an increase
of 20 percent. College performed better than expected despite an off year for
retailers generally.
BARNES & NOBLE 2011 LETTER TO SHAREHOLDERS
2 Barnes & Noble, Inc.