January 3, 2011
Barnes & Noble Reports Strong Holiday Results
Barnes & Noble Inc reported strong preliminary holiday results at its superstores, with its Nook e-readers proving to be popular.
The top U.S. bookseller said that same-store sales rose 9.7 percent before the nine-week period ended on January 1.Barnes & Noble introduced the Nook in 2009 in an attempt to compete with Amazon.com's market-leading Kindle e-reader as it seeks to prove itself viable during a time that bookbuyers' are switching to digital formats.
The retailer introduced an enhanced version of the device in the fall, known as NookColor, which has some functions similar to those of Apple's iPad tablet.
Barnes & Noble in November forecasted same-store sales for the entire current quarter, including the holiday period.
The retailer's numbers included Nook devices sold in stores but not on its website. Barnes & Noble said last week that the Nook had become its best selling single item ever. It said that it would release more detailed sales figures on Thursday.
Barnes & Noble stands to win market share from Borders Group inc., which said last week that it would delay payments to 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," which says that even if Borders manages to restructure its debt, new terms would be "onerous."
Souers called Borders' situation "dire" and said that its current crisis could benefit Barnes & Noble permanently. Borders has yet to develop its own e-reader, unlike Barnes & Noble.
"They've been left behind in the whole digital books transformation," Souers told Reuters, adding that Borders' liquidity problems were all the more alarming because they came during the holidays.
Sales at Borders' superstores dropped 13.7 percent in 2009 and 10.8 percent in 2008.
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