January 3, 2011 / 2:19 PM / 8 years ago

Barnes & Noble says Nook boosts holiday sales

NEW YORK (Reuters) - Barnes & Noble Inc reported strong preliminary holiday results at its superstores, led by the popularity of its Nook e-readers, and shares rose more than 5 percent.

The Barnes & Noble nook, a Wireless eBook Reader, is seen during a news conference in New York October 20, 2009. REUTERS/Shannon Stapleton

The top U.S. bookseller said that same-store sales, or sales at its superstores open at least 15 months, rose 9.7 percent for the nine-week period ended on January 1.

Barnes & Noble, which put itself up for sale in August, introduced the Nook in 2009 in a bid to compete with Amazon.com’s market-leading Kindle e-reader as it seeks to prove itself viable amid bookbuyers’ shift to digital formats.

In the fall, the retailer introduced a well-reviewed, enhanced version of the device, NookColor, which has some functions similar to those of Apple’s iPad tablet.

Barnes & Noble in November had forecast same-store sales for the entire current quarter, including the holiday period, would rise between 5 and 7 percent.

Barnes & Noble’s numbers include Nook devices sold in stores but not on its website. Last week, Barnes & Noble, which operates 717 namesake stores in the United States, said the Nook had become its best selling single item ever. The retailer said it would release more detailed sales figures on Thursday.

Barnes & Noble stands to win market share from its smaller rival, No. 2 U.S. bookstore chain Borders Group Inc, which said last week it would delay payments to some vendors as it seeks to negotiate new loan terms, putting into question publishers’ willingness to ship it new books.

Standard & Poor’s analyst Michael Souers downgraded Borders shares to “sell” from “hold,” saying that even if Borders manages to restructure its debt, the new terms would be “onerous.”

Souers called Borders’ situation “dire” and said its current crisis could benefit Barnes & Noble permanently. Unlike its larger rival, Borders has not to developed its own e-reader.

“They’ve been left behind in the whole digital books transformation,” Souers told Reuters, noting that Borders’ liquidity problems were all the more alarming because they came during the holidays, traditionally booksellers’ biggest season.

Borders has been contending with sharp declines in same-store sales. Comparable sales at Borders’ superstores fell 13.7 percent in 2009 and 10.8 percent in 2008.

Barnes & Noble shares were up 78 cents, or 5.5 percent, to $14.93, while Borders shares were down 3 cents to 87 cents. Borders shares are down 73 percent since hitting a yearly high in April.

Reporting by Phil Wahba, editing by Dave Zimmerman

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