Nook boosts holiday sales for Barnes & Noble
New York, January 4, 2011
Barnes & Noble reported strong preliminary holiday results at its superstores, led by the popularity of its Nook e-readers, and shares rose more than 5 per cent.
The top US bookseller said that same-store sales, or sales at its superstores open at least 15 months, rose 9.7 per cent for the nine-week period ended on Jan. 1.
Barnes & Noble, which put itself up for sale in August, introduced the Nook in 2009 in a bid to compete with Amazon.com's market-leading Kindle e-reader as it seeks to prove itself viable amid bookbuyers' shift to digital formats.
In the fall, the retailer introduced a well-reviewed, enhanced version of the device, NookColor, which has some functions similar to those of Apple's iPad tablet.
Barnes & Noble in November had forecast same-store sales for the entire current quarter, including the holiday period, would rise between 5 and 7 per cent.
Barnes & Noble's numbers include Nook devices sold in stores but not on its website. Last week, Barnes & Noble, which operates 717 namesake stores in the United States, said the Nook had become its best selling single item ever. The retailer said it would release more detailed sales figures on Thursday.
Barnes & Noble stands to win market share from its smaller rival, No. 2 US bookstore chain Borders Group Inc, which said last week it would delay payments to some vendors as it seeks to negotiate new loan terms, putting into question publishers' willingness to ship it new books.
Standard & Poor's analyst Michael Souers downgraded Borders shares to "sell" from "hold," saying that even if Borders manages to restructure its debt, the new terms would be "onerous." Souers called Borders' situation "dire" and said its current crisis could benefit Barnes & Noble permanently. Unlike its larger rival, Borders has not to developed its own e-reader.
"They've been left behind in the whole digital books transformation," Souers told Reuters, noting that Borders' liquidity problems were all the more alarming because they came during the holidays, traditionally booksellers' biggest season.
Borders has been contending with sharp declines in same-store sales. Comparable sales at Borders' superstores fell 13.7 per cent in 2009 and 10.8 per cent in 2008.
Barnes & Noble shares were up 78 cents, or 5.5 per cent, to $14.93, while Borders shares were down 3 cents to 87 cents.
Borders shares are down 73 per cent since hitting a yearly high in April. – Reuters
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