Barnes & Noble.com will consolidate Fatbrain.com , its corporate sales division, into its New York offices by the middle of the second quarter, Kevin Frain, v-p of finance for B&N.com told PW. While all the details of the consolidation have yet to be worked out, the company will close Fatbrain's California office and eliminate about 50 positions. Frain said B&N.com "remains committed" to the corporate marketplace, but believes it can bring more focus to the unit by moving the group to New York. B&N.com bought Fatbrain in September 2000 for $64 million; it took a $51.6 million charge in the fourth quarter that reflected the further consolidation of the unit, including a $38.6 million writedown representing goodwill and asset impairment charges.
Sales at Fatbrain fell 25% in the 2001, partially offsetting a 16% increase in consumer book sales. For the full year, total sales rose 7.9% to $404.6 million, the low end of the $400 million to $425 million range projected by the company in October. The net loss was reduced to $244.3 million from $329.7 million.
For the fourth quarter, sales in B&N.com's consumer book division rose 11.4%, but lower sales from its corporate business resulted in only a 0.9% increase in total sales to $115 million. Net loss in the quarter was cut to $127.8 million from $158.5 million. The figures for 2000 are adjusted to include Fatbrain results for the full year.
Sales in the consumer side were driven in the fourth quarter by solid gains in gift books, backlist titles, biographies, general nonfiction and new fiction. The company also attributed the improvement in part to the e-retailer's shipping policy instituted in July that provides for free shipping for all orders for at least two items. B&N.com has extended the policy "indefinitely."
Because of the weak corporate marketplace, B&N.com is projecting that revenues in 2002 will range anywhere from $400 million to $450 million. The company is confident that the consumer book business will be relatively strong in the year, but does not expect to see improvements in the corporate division until mid-year.
