Barnes and Noble 2012 Annual Report Download - page 4

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To Our Shareholders:
Barnes & Noble accomplished great things this year, growing our business and
investing in our future even as the book industry continued to struggle. Our focus
on innovation and transforming our company to meet our customers’ growing
appetite for digital content has generated new growth opportunities as well as
partnerships with technology leaders that will open even more doors for us.
We continue to be a market leader, as our world class bookstores and award
winning NOOK™ products have quickly become the essential portals through
which readers access the rapidly expanding universe of content.
Our bookstores had a terrifi c , growing comparable sales . for the year.
We saw traffi c and comparable sales increases in our bookstores as a result of
several factors, including market consolidation, notably the eff ects of a bankruptcy
of a major competitor, remarkable growth in sales of NOOK products, a strong title
line-up, and growth in non-book categories such as Toys & Games. And, of course,
excellent execution by our booksellers continued to delight our customers and kept
them coming back.
Our digital business continued to grow rapidly this year. NOOK content sales
grew to almost half a billion dollars and more than doubled year-over-year.
NOOK device unit sales increased approximately  over last year, fueled in
large part by our innovation and our leading portfolio of NOOK products. We
added to that portfolio with the introduction of the NOOK Simple Touch™ with
GlowLight™, which has quickly become the highest rated eReader in the market.
The combined strength of our retail and digital businesses gives us a unique
competitive advantage that we believe will generate more opportunities to extend
our leadership as the e-content provider of choice going forward.
We seized one of those opportunities in . Our new strategic partnership with
Microsoft refl ects recognition of the exciting potential of the NOOK business by
one of the world’s most important technology companies. Microsoft will make a
signifi cant investment in a company subsidiary called Newco, and will capitalize
this company to fuel continued growth in digital and international expansion.
This partnership will enable us to stay ahead of our customers’ demand to have
rich content when they want it, where they want it, and in the format they want.
BARNES & NOBLE 2012 LETTER TO SHAREHOLDERS
2 Barnes & Noble, Inc.