Chapters reported that sales for the year ended April 3, 1999, rose 26.6% to C$577.9 million, while net earnings increased 22.3% to C$10.3 million. Company president Larry Stevenson said he was pleased with the results, especially since the profit improvement included the absorption of a C$4.5-million loss from the firm's Internet business.
The sales gain was led by a 78% jump in superstore sales to C$296.9 million; superstores now account for 51% of Chapters' total sales. The leap in superstores revenue was the result of a 3.9% gain in comparable store sales as well as the opening of 25 new superstore outlets. Chapters finished the fiscal year with 54 superstores. The company expects to open 15 to 18 new superstores in fiscal 2000.
Sales in its traditional stores fell 9% to C$253.2 million as the company closed 44 outlets in the year, and comparable store sales inched up by less than 1%. Chapters was operating 261 traditional stores at the close of the fiscal year.
Sales in Chapters' "other" segment rose to C$27.6 million from C$11.1 million in fiscal 1998. The segment includes sales from Chapters' Internet business, university store (it manages the McGill University Bookstore), calendar kiosks and loyalty programs.
Chapters also announced last week that it is planning to sell three million new shares that it expects will raise approximately C$98 million. Stevenson said Chapters' portion of the funds -- about C$33 million -- will be used to support the company's Internet and wholesale business initiatives. He added that Chapters is still committed to taking the Internet division public. Barnes &Noble, which has a 17.5% stake in Chapters, plans to sell one million shares through the offering, a move that will gross B&N about C$33 million. After the offering, B&N's share in Chapters will slip to 7%.
