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.
Net loss for the quarter was $138.1 million, or 36 cents a share, compared
with a loss of $38.3 million, or 27 cents a share, in the year-ago period.
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.
