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BN.com Has Sales of $202M, Losses of $102M
Jim Milliot -- 2/14/00
Expects sales to top $350 million in 2000, profits in 2002



Barnes&Noble.com reported last week that revenues for 1999 jumped 227% to $202.6 million; although the company's net loss increased to $102.4 million, executives for the e-retailer said they hope to be profitable by 2002.

Marie Toulantis, BN.com's chief financial officer, said that events in 2000 should "set the stage for significantly decreasing losses in 2001, and we anticipate a quick rise to profitability in 2002." BN.com expects to reach profitability as the result of rapidly increasing sales, new product introductions, keeping costs under control and "monetizing" its customer base. The company expects sales in 2000 to be in the $350-million-$370-million range and forecasts that sales will increase at a compounded annual growth rate of about 40%-50% for 2001-2004. Books are expected to account for 80% of sales in 2000, but as BN.com introduces new products (such as videos and DVDs) to its product mix, nonbook items will represent a larger percentage of total revenues in future years.

BN.com expects to generate new revenue streams by leveraging its database, which currently stands at four million customers. It recently reached an agreement with MBNA to produce a co-branded credit card that, according to the e-retailer, will result in more than $25 million in fees over the course of the five-year agreement. More partnership agreements are expected.

While the company will continue to invest in all areas of its business, it expects margins to rise as costs as a percentage of revenues fall. Marketing costs, for example, were 38% of sales in 1999, but are forecast to fall to 19.7% this year and drop to 10.5% in 2001.

Now Barnes&Noble.com

In a move that reflects its strategy to work closer with its bricks-and-mortar parent company, Barnes & Noble, the e-retailer has changed its name to Barnes & Noble.com, although its URLs will remain barnesandnoble.com and bn.com.

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