Barnes & Noble's capital expenditures will be between $170 million and $190 million in the fiscal year ending January 31, 2003, according to the retailer's year-end filing with the Securities and Exchange Commission. The company will use the money primarily to open between 40 and 45 superstores plus 175 GameStops. B&N, which has 591 superstores, opened 40 superstores last year and closed 18. The company operates superstores in 150 out of 210 Designated Market Areas, and in 67 of those markets it operates only one store. The closing of 35 B. Dalton outlets left the company with 305 Dalton stores, and the number could be substantially trimmed this year; 169 Dalton leases will expire by the end of the fiscal year.
The SEC filing notes that B&N buys books from more than 1,700 publishers and 45 wholesalers, with the top five suppliers accounting for 44% of its book purchases in the year. No one supplier accounts for more than 15% of purchases. The company also bought $168 million in product from AEC, a music and video wholesaler in which B&N chairman Len Riggio is a minority investor.
B&N expanded a bit on its takeover of the lease on Barnes & Noble.com's Reno, Nev., warehouse (News, Apr. 15). B&N will spend $2 million to refurbish the facility and intends to use it to speed delivery to West Coast accounts. It expects to assume control of the warehouse by the summer.
The filing also notes that B&N lost $11.7 million on its equity investments during the year. It lost $2.5 million on its 50% stake in Book magazine and lost $5.6 million on its 49% stake in enews, an Internet marketer of magazine subscriptions. The company also lost $4 million on its 22% stake in iUniverse.com, making the total loss for the online publisher roughly $20 million. It lost about $30 million in 2000.
Extraordinary expenses in the year included $4.5 million in legal costs, comprising a $2.4-million payment to the ABA and $2.1 million in legal expenses incurred in the first quarter.
