Barnesandnoble.com Sees Jump in Q1 Sales

The company said it was able to achieve the increase by keeping its promotional offers -- such as free shipping and offline advertising -- at a minimum.

"In an environment where the flattening of e-commerce sales is being widely reported, especially in the book industry, our sales continue to grow," said Barnesandnoble.com vice chairman Steve Riggio.

The growth spurt is "a clear indication that e-commerce is an important component of the bookselling retail marketplace," Riggio added.

"As the e-commerce market continues to consolidate, we believe Barnesandnoble.com is well positioned to grow sales and market share going forward," Riggio said.

The e-tailer, which is majority owned by its brick-and-mortar namesake Barnes & Noble and German media giant Bertelsmann AG, provided no guidance for its expected first-quarter loss. Analysts surveyed by First Call/Thomson Financial estimate a loss of 22 cents per share.

Barnesandnoble.com is slated to report its full financial results for the period after the markets close on April 26th.

Away from Amazon?

The strong sales at Barnesandnoble.com may indicate that Amazon's virtual dominance in the Internet book sales sector is on the wane.

"Based on preliminary first-quarter data, we believe that [Barnesandnoble.com] gained significant market share from archrival Amazon.com," Prudential Securities analyst Mark Rowen reportedly wrote in a note to investors on Tuesday.

However, Rowen cautioned that if Barnesandnoble.com's figures factor in sales at its kiosks located in Barnes & Noble stores, the comparison to Amazon may not be an "apples to apples" comparision.

Checking Amazon's Books

Once the undisputed champ for online book sales, Amazon said last week that its core business of books, movies and videos saw "very slight" sales growth during the first quarter.

Instead, the Seattle-based Internet heavyweight said it will post a narrower-than-expected loss for the period due to a surge in its sales of electronic goods, leaving some analysts to question whether the company can sustain long-term growth and still reach profitability.

Barnesandnoble.com's rate of sales growth apparently is outpacing that of Amazon, which said it will report a 21 percent increase in sales for the first quarter over the year-ago period.

Playing Catch-Up

Still, Barnesandnoble.com has a long way to go before overtaking Amazon's lead.

Amazon consistently ranks as one of the most visited Web properties. Last year, Amazon sold $1.7 billion worth of books, music and videos, and is slated to report net sales of more than $695 million for the first quarter. In contrast, Barnesandnoble.com sold $320 million in 2000.

Amazon is slated to release complete first-quarter results after the market closes on April 24th.

Brick Building

The contest between the two e-tail giants is far from over. For its part, Amazon has taken steps to move into the brick-and-click arena, which appears to have proven an effective selling strategy for Barnesandnoble.com.

Amazon announced last week that it is taking over the online operations of Borders, a union that may prove troublesome for Barnesandnoble.com. Amazon and Borders said that the Borders.com site will re-launch as a co-branded Amazon site in August.

The new site will combine the selection of books, music, videos and DVDs currently available through Amazon as well as several features unique to the Borders site, namely store location information and in-store event calendars.

Analysts say that alliances with brick-and-mortar partners are crucial for Amazon's long-term survival.

Behind the Numbers

In February, Barnesandnoble.com posted a fourth-quarter 2000 loss of $143.49 million, or 90 cents per share, a more than three-fold increase over the $38.34 million loss, or 27 cents per share, it reported in the same period a year earlier.

The company attributed the big loss to several one-time investments in distribution, technology and customer service , as well as its acquisition of business publisher Fatbrain.com.

In addition, Barnesandnoble.com slashed its workforce by 16 percent, accounting for about 350 full-time positions, and closed two facilities.

The e-tailer also noted that it anticipated its losses for 2001 will narrow as the "effects of [its] consolidation program are realized and [it] gains leverage in [its] distribution network and infrastructure expenses."