Borders liquidation expected to boost Barnes & Noble by up to $200 million
File photo | AnnArbor.com
The New York-based retailer said today that it is projecting a sales increase at stores open at least a year to increase 2 percent to 3 percent during its 2012 fiscal year, which started May 1.
The company has acknowledged a temporary surge in the competitive landscape because consumers are flocking to Borders to find discounts while the chain closes its remaining 399 stores.
But in the long run, Barnes & Noble is expected to benefit from Borders' demise. B&N said it expects a revenue increase of $150 million to $200 million in its current fiscal year — but it acknowledged a risk that the increase could be lower.
Barnes & Noble had 36.0 percent of the bookstore market share in March, while Borders still had 10.7 percent, according to a report by research firm IBISWorld.
Barnes & Noble finds itself in a situation similar to that of Best Buy, which benefited from competitor Circuit City's liquidation in 2009 but didn't get as big of a boost as some experts projected.
The retailer is hoping that its own electronic books reader, a device called the Nook, will help the company survive dynamic changes in the book industry.
"The company is encouraged by the progress achieved against our strategy and believes in our plan to continue to appropriately invest in the massive digital opportunity," Barnes & Noble CEO William Lynch said in a statement.