Barnesandnoble.com (Nasdaq: BNBN) was down 19U.S. cents at $1.94 early Thursday after the online bookseller reported a bigloss for the fourth quarter and announced a plan to cut 350 jobs, or 16percent of its workforce.
Due in part to expenses incurred with the acquisition of business publisher Fatbrain.com, the company posted a loss of $143.49 million, or 90cents per share, compared with a loss of $38.34 million, or 27 cents, in thesame period a year earlier.
Prudential Securities reportedly repeated a sell recommendation on theshares following the news.
The job cuts will come as the company consolidates its distribution centers, closing a processing center in New Jersey and a Fatbrain operation in Kentucky, while expanding operations in Memphis, Tennessee and Reno, Nevada.
Barnesandnoble.com will also reorganize its administrative operations, cutting some jobs at its New York City headquarters and at Fatbrain’s headquarters in Santa Clara, California.
The cuts and closings resulted in a charge of about $75 million tofourth-quarter 2000 results. Another $5 million charge will come in the first halfof this year as the reorganization gets underway.
“While we sincerely regret the impact of this consolidation in human terms,we believe the changes are necessary to improve every part of ouroperation,” said Barnesandnoble.com vice chairman Steve Riggio.
Riggio added: “During2000 we made a number of one-time investments in distribution, technologyand customer service to improve efficiencies and provide ample capacity forgrowth. With these investments behind us and a leaner organization, weexpect to significantly curtail our spending.”
Barnesandnoble.com said it added more than a million new customersduring the quarter ended December 31st, for a total of more than 7.3million.
The company also said it expects first-quarter sales of $90 million to $100million, with a pro forma loss of 19 to 22 cents per share. Pro forma results include the operations of Fatbrain.com.
In 2000, first-quarter 2000 pro forma sales were $88.6 million with a loss of 23cents per share.
“We anticipate narrower losses for 2001 as the effects of our consolidationprogram are realized and we gain leverage in our distribution network andinfrastructure expenses,” said chief financial officer Marie Toulantis.
The company may need to seek financing in the first half of 2002, saidToulantis, who added that “management is committed to taking all measuresnecessary to defer such financing if possible.”