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Friday, Aug. 21, 1998
Bookseller offers stake in Web division
Barnes & Noble plans to sell part of its money-losing online operation
By RACHEL BECK
Associated PressNEW YORK - Barnes & Noble Inc. will sell a 20 percent stake in its money-losing online division in a move that will help the bookselling giant go up against its fierce rival Amazon.com and others joining the Internet market.
Plans for an initial public offering for barnesandnoble.com comes amid keen demand for Internet-related stocks, with investors looking at these shares as a hook into the booming online industry.
Wall Street cheered Thursday's announcement, sending Barnes & Noble stock up almost 12 percent in early trading. Its stock was up $2.50 at $39.75 per share on the New York Stock Exchange in afternoon trading.
The world's largest bookseller announced that it will file a registration statement with the Securities and Exchange Commission in the next 30 days for an initial public offering of barnesandnoble.com stock.
But the New York-based company said the registration of the IPO is subject to stock market conditions in the next month.
An IPO would help Barnes & Noble raise cash to expand its online division and better compete against rivals.
While Amazon.com reigns as the No. 1 online bookseller, others are beginning to tap the market. Borders and Wal-Mart Stores both sell online, and German media group Bertelsmann said earlier this year that it plans to form ``BooksOnline.''
New cash could help barnesandnoble.com develop itself into a destination site, which would attract a wider range of consumers by selling more than just books. Amazon.com recently added music and has said it plans to get into a broad array of electronic shopping services.
``Barnes & Noble didn't even think they needed to sell on the Internet until Amazon came along,'' said Pam Stubing, associate director of retailing at the consulting firm Ernst & Young. ``Now they see that they have to go beyond books to survive.''
Barnes & Noble on Thursday also reported a second-quarter loss larger than a year ago.
It lost $5.71 million, or 8 cents a share on a diluted basis, in the quarter ended Aug. 1, compared with a loss of $1.37 million, or 2 cents per share, a year ago.
Most of the loss came from the online division where there was an operating loss of $23 million for the quarter. Like Amazon.com, barnesandnoble.com has yet to generate a profit.
Sales for the quarter were $675 million, up from $617.7 million a year ago.
As of Aug. 1, the company operated 489 Barnes & Noble stores and 510 B. Dalton stores. The company opened nine Barnes & Noble stores in the second quarter and closed one. Ten B. Dalton stores were closed.
For the first half of the year, Barnes & Noble reported a loss of $9.04 million, or 13 cents a share on a diluted basis, compared with a loss of $5.23 million, or 8 cents a share, a year ago.
Sales were $1.34 billion in the first half, up $1.2 billion from a year ago.Post your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web