Banesandnoble.com Issues 350 Pink Slips, Closes 2 Offices
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Despite a 65-percent increase in sales from a year ago, Barnesandnoble.com Wednesday said it was necessary to consolidate by eliminating 16 percent of its work force, or 350 positions.
Staff will be cut from the firm's New York-based headquarters and the Fatbrain.com head office in Santa Clara, Calif. BNBN will also close its New Jersey processing center and the Fatbrain.com book fulfillment operation in Kentucky.
In spite of this, BNBN will take a charge of about $75 million in the fourth quarter of 2000 relating to the impairment of certain equity investments and assets, as well as an additional $5 million charge in 2001 to cover severance and other costs related to the closing of facilities.
Sales for the full year ended Dec. 31, 2000 were $320.1 million, up more than 65 percent from $193.7 million a year ago. Gross margin for the fourth quarter of 2000 was 21.1 percent, compared with 14.1 percent in the corresponding period a year ago.
BNBN had issued a warning earlier in the quarter and analysts lowered expectations after the warning, bringing First Call/Thomson estimates down to a loss of 31 cents a share for the quarter.
In expressing his regret for the firings, Steve Riggio, vice chairman of the e-tailer, said the cuts and office closings were necessary to streamline the business and curtail the company's spending.
"We believe that by leveraging the many accomplishments of the last year, we are in a strong position for growth in 2001 and beyond," Riggio said.
Shares of Barnes & Noble.com
closed at $2.12.