<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time a final prospectus supplement is
delivered. This prospectus supplement shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any
such State.
PROSPECTUS SUPPLEMENT (SUBJECT TO COMPLETION)
(TO PROSPECTUS DATED MARCH 27, 1997)
ISSUED MARCH 27, 1997
1,820,386 SHARES
[LOGO]
COMMON STOCK
------------------------
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS RELATE TO 1,820,386
SHARES (THE 'SHARES') OF COMMON STOCK, PAR VALUE $.001 PER SHARE (THE 'COMMON
STOCK'), OF BARNES & NOBLE, INC., A DELAWARE CORPORATION (THE 'COMPANY'),
OFFERED HEREBY (THE 'OFFERING') BY VENDEX INTERNATIONAL N.V., A
CORPORATION ORGANIZED UNDER THE LAWS OF THE NETHERLANDS (THE 'SELLING
STOCKHOLDER'), AND SOLD BY THE UNDERWRITER NAMED BELOW. SEE 'SELLING
STOCKHOLDER' IN THE ACCOMPANYING PROSPECTUS AND 'THE UNDERWRITER'.
THE COMPANY WILL NOT RECEIVE ANY PROCEEDS FROM THE SALE OF THE
SHARES OFFERED HEREBY. THE COMMON STOCK IS LISTED ON THE NEW
YORK STOCK EXCHANGE (THE 'NYSE') UNDER THE SYMBOL 'BKS'.
ON MARCH 26, 1997, THE REPORTED LAST SALES PRICE
OF THE COMMON STOCK ON THE NYSE WAS $36 1/4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
PRICE $ A SHARE
------------------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS (1) SELLING STOCKHOLDER (2)
------------ --------------- ------------------------
<S> <C> <C> <C>
Per Share............ $ $ $
Total................ $ $ $
</TABLE>
- ------------------
(1) The Company and the Selling Stockholder have agreed to indemnify the
Underwriter against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See 'Underwriter.'
(2) Before deducting expenses payable by the Selling Stockholder estimated at
$100,000.
------------------------
The Shares are offered, subject to prior sale, when, as and if accepted by
the Underwriter and subject to approval of certain legal matters by Skadden,
Arps, Slate, Meagher & Flom LLP, counsel for the Underwriter. It is expected
that delivery of the Shares will be made on or about April , 1997 at the
office of Morgan Stanley & Co. Incorporated, New York, N.Y., against payment
therefor in immediately available funds.
------------------------
MORGAN STANLEY & CO.
INCORPORATED
April , 1997
<PAGE>
No dealer, salesperson or any other person has been authorized in
connection with any offering made hereby to give any information or to make any
representation other than as contained in this Prospectus Supplement or the
Prospectus, and if given or made, such information or representation must not be
relied upon as having been authorized by the Company, the Selling Stockholder or
the Underwriter. This Prospectus Supplement or the Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any security
other than the Shares offered hereby, nor does it constitute an offer to sell or
a solicitation of an offer to buy any of the Shares offered hereby to any person
in any jurisdiction in which it is unlawful to make such an offer or
solicitation to such person. Neither the delivery of this Prospectus Supplement
or the Prospectus nor any sale made hereunder shall under any circumstances
imply that the information contained herein is correct as of any date subsequent
to the date hereof.
------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Use of Proceeds................................ S-3
The Underwriter................................ S-3
Legal Matters.................................. S-4
</TABLE>
PROSPECTUS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.......................... 2
Incorporation of Certain Documents by
Reference.................................... 2
The Company.................................... 3
Use of Proceeds................................ 4
Price Range of Common Stock.................... 5
Selected Consolidated Financial Data........... 6
Selling Stockholder............................ 8
Plan of Distribution........................... 8
Legal Matters.................................. 8
Experts........................................ 9
Certain Forward-Looking Statements............. 9
</TABLE>
------------------
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITER MAY OVERALLOT IN CONNECTION WITH THE OFFERING, AND
MAY BID FOR, AND PURCHASE, SHARES OF THE COMMON STOCK IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE 'THE UNDERWRITER.'
S-2
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholder.
THE UNDERWRITER
Under the terms and subject to the conditions contained in an Underwriting
Agreement and Pricing Agreement each dated the date hereof (collectively, the
'Underwriting Agreement'), Morgan Stanley & Co. Incorporated (the 'Underwriter')
has agreed to purchase, and the Selling Stockholder has agreed to sell to the
Underwriter, the Shares.
The Underwriting Agreement provides that the obligation of the Underwriter
to pay for and accept delivery of the Shares is subject to the approval of
certain legal matters by its counsel and to certain other conditions. The
Underwriter is obligated to take and pay for all the Shares if any are taken.
It is expected that all or a substantial portion of the Shares may be sold
by the Underwriter to purchasers in one or more transactions (which may involve
block transactions) on the NYSE or otherwise. The distribution of the Shares may
also be effected from time to time in special offerings, exchange distributions
and/or secondary distributions pursuant to and in accordance with the rules of
the NYSE, in the over-the-counter market, in negotiated transactions through the
writing of options on the Shares (whether such options are listed on an options
exchange or otherwise), or in a combination of such methods at prevailing market
prices or at negotiated prices. The Underwriter may effect such transactions by
selling Shares to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the Underwriter and/or
the purchasers of such Shares for whom they may act as agents or to whom they
may sell as principal.
In connection with the sale of the Shares, the Underwriter will receive
compensation in the form of commissions or discounts and may receive
compensation from purchasers of the Shares for whom they may act as agent or to
whom they may sell as principal in the form of commissions or discounts, in each
case in amounts which will not exceed those customary in the types of
transactions involved. The Underwriters and dealers that participate in the
distribution of the Shares may be deemed to be underwriters, and any discounts
received by them from the Selling Stockholder and any compensation received by
them on resale of the Shares by them may be deemed to be underwriting discounts
and commissions under the Securities Act.
The Company has agreed that, without the prior written consent of the
Underwriters, it will not offer, sell, contract to sell or otherwise dispose of
any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock for a period of 90 days after the date of this
Prospectus Supplement, other than (i) any shares of Common Stock sold upon the
exercise of an option or warrant or the conversion or exchange of a security
outstanding on the date of this Prospectus Supplement, and (ii) any securities
of the Company sold or granted pursuant to the Company's stock option plans. In
addition, Leonard Riggio, the Chairman of the Board, Chief Executive Officer and
principal stockholder of the Company, and Barnes & Noble College Bookstores,
Inc., a New York corporation owned by Mr. Riggio, as holders of an aggregate of
7,012,376 shares of Common Stock, have agreed (with certain exceptions) not to
offer, sell, contract to sell or otherwise dispose of such shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock for a period of 90 days after the date of this Prospectus
Supplement without the prior written consent of the Underwriter.
In order to facilitate the offering of the Common Stock, the Underwriter
may engage in transactions that stabilize, maintain or otherwise affect the
price of the Common Stock. Specifically, the Underwriter may overallot in
connection with the Offering, creating a short position in the Common Stock for
their own account. In addition, to cover overallotments or to stabilize the
price of the Common Stock, the Underwriter may bid for, and purchase, shares of
the Common Stock in the open market. Finally, the underwriting syndicate may
reclaim selling concessions allowed to an underwriter or a dealer for
distributing the Common Stock in the Offering, if the syndicate repurchases
previously distributed Common Stock in transactions to cover syndicate short
positions, in stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market price of the Common Stock above independent
market levels. The Underwriter is not required to engage in these activities,
and may end any of these activities at any time.
S-3
<PAGE>
The Company and the Selling Stockholder have agreed to indemnify the
Underwriter against certain liabilities, including liabilities under the
Securities Act, or contribute to payments which the Underwriter may be required
to make in respect thereof.
LEGAL MATTERS
Certain legal matters in connection with the offering to which this
Prospectus Supplement and the accompanying Prospectus relates will be passed
upon for the Company by Robinson Silverman Pearce Aronsohn & Berman LLP, New
York, New York. Certain legal matters will be passed on for the Underwriter by
Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York. Certain legal
matters will be passed on for the Selling Stockholder by Dewey Ballantine, New
York, New York.
S-4
<PAGE>
PROSPECTUS
1,820,386 SHARES
[LOGO]
COMMON STOCK
------------------------
This Prospectus relates to 1,820,386 shares (the 'Shares') of common stock, par
value $.001 per share ('Common Stock'), of Barnes & Noble, Inc. ('Barnes &
Noble' or the 'Company'), which may be offered by the selling stockholder named
herein (the 'Selling Stockholder') from time to time. The Company will receive
no part of the proceeds from sales of the Shares offered hereby.
The Shares are listed on the New York Stock Exchange (the 'NYSE') under the
trading symbol 'BKS'. On March 26, 1997, the closing price of the Common Stock
on the NYSE was $36.25 per share.
The Shares will be sold either directly by the Selling Stockholder or
through underwriters, brokers, dealers or agents. At the time any particular
offer of Shares is made, if and to the extent required, the specific number of
Shares offered, the offering price, and the other terms of the offering,
including the names of any underwriters, brokers, dealers or agents involved in
the offering and the compensation, if any, of such underwriters, brokers,
dealers or agents, will be set forth in a supplement to this Prospectus (a
'Prospectus Supplement'). Any statement contained in this Prospectus will be
deemed to be modified or superseded by any inconsistent statement contained in
any Prospectus Supplement delivered herewith.
Unless this Prospectus is accompanied by a Prospectus Supplement stating
otherwise, offers and sales may be made pursuant to this Prospectus only in
ordinary broker's transactions made on the NYSE in transactions involving
ordinary and customary brokerage commissions.
The Selling Stockholder will bear all expenses incurred in connection with
offers and sales of the Shares pursuant to this Prospectus, including any
underwriting discounts and commissions, and transfer taxes incurred in
connection therewith.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS MARCH 27, 1997.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the 'Exchange Act'), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the 'Commission'). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549; Seven World Trade Center, New York, New
York 10048; and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60606. Copies of such materials can be obtained from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Such materials can also be
inspected at the offices of the NYSE, 20 Broad Street, New York, New York 10005,
on which exchange the Common Stock is listed. The Commission maintains a Web
site that contains reports, proxy statements and other information filed
electronically by the Company with the Commission which can be accessed over the
Internet at http://www.sec.gov.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission under the Securities Act of 1933, as amended (the
'Securities Act'). This Prospectus omits certain of the information contained in
the Registration Statement, and reference is hereby made to the Registration
Statement and to the exhibits thereto for further information with respect to
the Company and the Common Stock offered hereby. Any statements contained herein
concerning the provisions of any document are not necessarily complete, and, in
each instance, reference is made to such copy filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference. The Registration
Statement and the exhibits thereto may be inspected without charge at the office
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and copies thereof may be obtained from the Commission at prescribed
rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference: (i) the Company's Annual Report on Form 10-K
for the fiscal year ended January 27, 1996; (ii) the Company's Quarterly Reports
on Form 10-Q for the fiscal quarters ended April 27, 1996, July 27, 1996 and
October 26, 1996; and (iii) the description of the Common Stock contained in
Item 1 of the Company's Registration Statement on Form 8-A filed with the
Commission on September 2, 1993.
All documents subsequently filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of the offering made hereby shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated herein by reference modifies or supersedes such prior
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain from the Company,
without charge, upon written or oral request, a copy of any of the documents
incorporated by reference herein, except for the exhibits to such documents
(other than the exhibits expressly incorporated in such documents by reference).
Requests should be directed to the Director of Investor Relations, Barnes &
Noble, Inc., 122 Fifth Avenue, New York, New York 10011 (telephone: (212)
633-3336).
2
<PAGE>
THE COMPANY
The following summary of the business of the Company is qualified in its
entirety by and should be read together with the more detailed information and
financial statements incorporated by reference in this Prospectus. See
'Incorporation of Certain Documents by Reference.'
Barnes & Noble is the world's largest bookseller, operating 1,008 stores in
all 50 states and the District of Columbia as of February 1, 1997. The Company's
rapidly expanding superstore operations consist of 431 book superstores
primarily under the Barnes & Noble tradename, and its mall bookstore operations
consist of 577 stores primarily under the B. Dalton tradename. The Company also
publishes books under its 'Barnes & Noble Books' imprint for exclusive sale
through the Company's retail stores and mail-order catalogs. Barnes & Noble
superstores offer an authoritative selection of more than 175,000 titles from
more than 10,000 publishers, with an emphasis on small, independent publishers
and university presses. The Company is also the exclusive bookseller in America
Online's Marketplace and expects to launch a World Wide Web site, operating the
'world's largest bookseller online', in the near future.
The Company opened 91 superstores during the 53 weeks ended February 1,
1997 (the '1996 Fiscal Year') and closed 18 superstores, of which 12 were
relocated. The Company opened 10 mall bookstores in the 1996 Fiscal Year and
closed 72. The Company expects to open approximately 70 superstores in the 52
weeks ending January 31, 1998.
The Company believes it is well-positioned to capitalize on the continuing
growth trends in the United States retail book market, and to create new demand
for consumer books. The Company's operating stategy is to achieve growth and
increase profitability by (i) continuing the expansion of its superstore
business, (ii) exploiting the Company's significant investment in systems and
distribution to increase store productivity and customer service, (iii)
exploiting economies of scale available to the Company, (iv) increasing sales of
books published by the Company, and (v) expanding the Company's channels of
distribution to include the Internet.
The Company recently reported its unaudited financial results for the 1996
Fiscal Year. Net earnings for the 1996 Fiscal Year were $51.2 million, an
increase of 49% over $34.3 million of net earnings for the 52 weeks ended
January 27, 1996 (the '1995 Fiscal Year'), before giving effect to the
restructuring charge in the 1995 Fiscal Year referred to in note 1 to 'Selected
Consolidated Financial Data.' The discussion below of results for the 1995
Fiscal Year, other than balance sheet data, excludes the effect of such charge.
Net earnings per common share were $1.48 for the 1996 Fiscal Year (based on 34.6
million shares), up 41% from $1.05 per share for the 1995 Fiscal Year (based on
32.8 million shares). Net earnings for the Company's fourth quarter of the 1996
Fiscal Year rose by 35% to $62.0 million from $45.7 million in the fourth
quarter of the 1995 Fiscal Year. Net earnings per common share for the fourth
quarter of the 1996 Fiscal Year also increased 35% to $1.80 from $1.33 for the
fourth quarter of the 1995 Fiscal Year. Revenues for the 1996 Fiscal Year were
$2.448 billion, up 24% from $1.977 billion in the 1995 Fiscal Year. Superstore
revenues rose 38% to $1.9 billion from $1.4 billion in the 1995 Fiscal Year and
increased as a percentage of total revenues to 76% from 68% for the 1995 Fiscal
Year. Comparable store sales for the Company's superstores, including store
relocations, rose 7.3% for the 1996 Fiscal Year and 8.7% in the fourth quarter
of the 1996 Fiscal Year. Comparable store sales for the Company's mall
bookstores, excluding store closings, declined (1.0)% for the 1996 Fiscal Year
and (3.3)% for the fourth quarter of the 1996 Fiscal Year.
Operating margins improved to 4.9% of revenues in the 1996 Fiscal Year, up
from 4.5% in the 1995 Fiscal Year. Selling and administrative expenses as a
percentage of revenues decreased to 18.6% from 19.1% in the 1995 Fiscal Year.
Reflecting a significant improvement in turnover, merchandise inventories
decreased to $732.2 million at the end of the 1996 Fiscal Year from $740.4
million at the end of the 1995 Fiscal Year, a reduction of (1.1)%, despite the
addition of 91 new superstores and the initial stocking of the Company's new
distribution center. Stockholders' equity increased to $456.0 million at the end
of the 1996 Fiscal Year, up 14% from $400.2 million at the end of the 1995
Fiscal Year. Return on beginning stockholders' equity improved to
3
<PAGE>
13% in the 1996 Fiscal Year, up from 10% in the 1995 Fiscal Year. The table
below sets forth some of the financial results discussed above.
<TABLE>
<CAPTION>
1995 1996
FISCAL YEAR FISCAL YEAR
------------ ------------
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
<S> <C> <C>
Revenues................................ $1,976,900 $2,448,124
Operating profit........................ $ 88,612 $ 119,668
Net earnings............................ $ 34,327 $ 51,225
Net earnings per common share........... $ 1.05 $ 1.48
Merchandise inventories................. $ 740,351 $ 732,203
Stockholders' equity.................... $ 400,235 $ 455,989
</TABLE>
The Company's principal executive offices are located at 122 Fifth Avenue,
New York, New York 10011 and its telephone number is (212) 633-3300.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholder.
4
<PAGE>
PRICE RANGE OF COMMON STOCK
The shares of the Common Stock are listed and principally trade on the NYSE
and quoted under the trading symbol 'BKS.' The following table sets forth, for
the quarters indicated, the high and low sales prices of the Common Stock on the
NYSE as reported on the NYSE Composite Tape.
<TABLE>
<CAPTION>
PERIOD ENDED HIGH LOW
- ------------ ---- ---
<S> <C> <C>
Fiscal Year Ending January 31, 1998:
First Quarter (through March 26, 1997)................................................ $39 7/8 $30 3/8
Fiscal Year Ended February 1, 1997:
Fourth Quarter........................................................................ $34 3/8 $25 3/4
Third Quarter......................................................................... 35 3/4 29 5/8
Second Quarter........................................................................ 37 3/4 28 3/4
First Quarter......................................................................... 36 1/4 23 3/4
Fiscal Year Ended January 27, 1996:
Fourth Quarter........................................................................ $39 3/4 $23 1/4
Third Quarter......................................................................... 42 1/4 33 7/8
Second Quarter........................................................................ 38 7/8 26 5/8
First Quarter......................................................................... 32 3/4 27 1/4
Fiscal Year Ended January 28, 1995:
Fourth Quarter........................................................................ $31 3/8 $25 5/8
Third Quarter......................................................................... 29 1/4 24 5/8
Second Quarter........................................................................ 26 20
First Quarter......................................................................... 28 1/2 20 1/2
</TABLE>
On March 26, 1997, the last sales price reported for the Common Stock on
the NYSE was $36.25 per share. Prospective purchasers of Shares are urged to
obtain current quotations for the market price of the Common Stock.
5
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data of the Company and its
subsidiaries set forth below should be read in conjunction with the Company's
consolidated financial statements and notes incorporated herein by reference.
The Company's fiscal year is comprised of 52 or 53 weeks, ending on the Saturday
closest to the last day of January. The Statement of Operations Data for the 52
weeks ended January 27, 1996, January 28, 1995 and January 29, 1994 and the
Balance Sheet Data as of January 27, 1996 and January 28, 1995 are derived from,
and are qualified by reference to, audited consolidated financial statements
which are incorporated herein by reference. The Statement of Operations Data for
the 52 weeks ended January 30, 1993 and February 1, 1992 and the Balance Sheet
Data as of January 29, 1994, January 30, 1993 and February 1, 1992 are derived
from audited consolidated financial statements which are not included herein.
The Statement of Operations Data for the 39 weeks ended October 26, 1996 and
October 28, 1995 and the Balance Sheet Data as of October 26, 1996 and October
28, 1995 are derived from unaudited consolidated financial statements which are
not included herein. Data for the 39-week periods presented include all
adjustments, consisting of normal recurring accruals, which management considers
necessary for a fair presentation of the financial condition and results of
operations of the Company for such periods. Due to the seasonal nature of the
Company's business, the results for the 39- week periods presented are not
indicative of the results for the full fiscal year. See 'The Company' for
unaudited financial information reported by the Company with respect to the
fourth quarter of the 1996 Fiscal Year.
<TABLE>
<CAPTION>
52 WEEKS ENDED 39 WEEKS ENDED
------------------------------------------------------------------- -------------------------
FEBRUARY 1, JANUARY 30, JANUARY 29, JANUARY 28, JANUARY 27, OCTOBER 28, OCTOBER 26,
1992 1993 1994 1995 1996 1995 1996
----------- ----------- ----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues
Superstores................. $ 153,608 $ 328,766 $ 614,646 $ 952,697 $1,349,830 $ 854,084 $1,193,331
Mall bookstores............. 718,819 706,862 688,220 646,876 603,204 383,077 357,694
Other....................... 48,552 51,075 34,520 23,158 23,866 17,205 14,614
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total revenues............ 920,979 1,086,703 1,337,386 1,622,731 1,976,900 1,254,366 1,565,639
Cost of sales, buying and
occupancy................... 597,612 711,845 874,038 1,050,011 1,269,001 815,006 1,014,883
----------- ----------- ----------- ----------- ----------- ----------- -----------
Gross profit................ 323,367 374,858 463,348 572,720 707,899 439,360 550,756
Selling and administrative
expenses.................... 195,124 221,266 262,861 311,344 376,773 263,606 319,459
Rental expenses............... 79,891 91,792 120,326 147,225 182,473 129,505 163,933
Depreciation and
amortization................ 23,854 25,082 29,077 36,617 47,881 33,668 43,319
Pre-opening expenses.......... 1,842 6,004 8,940 9,021 12,160 8,495 13,986
Restructuring charge (1)...... -- -- -- -- 123,768 -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Operating profit (loss)..... 22,656 30,714 42,144 68,513 (35,156) 4,086 10,059
Interest expense, net and
amortization of debt
discount (2)................ 28,336 26,858 25,807 22,955 28,142 20,810 28,105
----------- ----------- ----------- ----------- ----------- ----------- -----------
Earnings (loss) before
provision (benefit) for
income taxes,
extraordinary item and
cumulative effect of a
change in accounting
principle................. (5,680) 3,856 16,337 45,558 (63,298) (16,724) (18,046)
Provision (benefit) for income
taxes....................... (270) 3,646 8,584 20,085 (10,322) (5,314) (7,310)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Earnings (loss) before
extraordinary item and
cumulative effect of a
change in accounting
principle................. (5,410) 210 7,753 25,473 (52,976) (11,410) (10,736)
Extraordinary loss (3)........ -- 6,663 -- -- -- -- --
Cumulative effect of a
change in accounting
principle (4)............. -- 2,052 -- -- -- -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net earnings (loss) (5)..... $ (5,410) $ (8,505) $ 7,753 $ 25,473 $ (52,976) $ (11,410) $ (10,736)
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net earnings (loss) per common
share (6)(9)................ $ -- $ 0.01 $ 0.30 $ 0.81 $ (1.70) $ (0.37) $ (0.33)
Weighted average common shares
outstanding (6)(9).......... -- 20,528,000 26,194,000 31,344,000 31,217,000 30,637,000 33,006,000
STORE OPERATING DATA:
Stores open at end of period
Superstores................. 58 135 203 268 358 322 408
Mall bookstores (7)......... 805 781 734 698 639 671 611
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total..................... 863 916 937 966 997 993 1,019
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
6
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA--(CONTINUED)
<TABLE>
<CAPTION>
52 WEEKS ENDED 39 WEEKS ENDED
------------------------------------------------------------------- -------------------------
FEBRUARY 1, JANUARY 30, JANUARY 29, JANUARY 28, JANUARY 27, OCTOBER 28, OCTOBER 26,
1992 1993 1994 1995 1996 1995 1996
----------- ----------- ----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Comparable store sales
increase (decrease) (8)
Superstores................. 0.2% 5.2% 8.6% 12.6% 6.9% 8.6% 4.9%
Mall bookstores (7)......... (1.4) 2.5 (0.3) (2.3) (4.3) (4.7) (0.6)
Capital expenditures.......... $ 35,053 $ 64,987 $ 81,116 $ 88,763 $ 154,913 $ 105,692 $ 142,954
BALANCE SHEET DATA (AT END OF
PERIOD):
Working capital (deficit)..... $ (29,359) $ 114,677 $ 182,403 $ 155,976 $ 226,500 $ 178,458 $ 145,480
Total assets.................. 532,591 712,055 895,863 1,026,418 1,315,342 1,383,353 1,531,733
Long-term debt, less current
portions.................... 174,751 190,000 190,000 190,000 262,400 190,000 290,000
Preferred stock subject to
redemption, including
cumulative dividends in
arrears..................... -- 66,248 -- -- -- -- --
Stockholders' equity.......... 57,634 146,754 328,841 358,173 400,235 441,751 393,617
</TABLE>
- ------------------
(1) Restructuring charge includes restructuring and asset impairment losses
recognized upon adoption of Financial Accounting Standards No. 121
'Accounting for Impairment of Long-Lived Assets and Assets to be Disposed
of '.
(2) Interest expense for the 52 weeks ended February 1, 1992, January 30, 1993,
January 29, 1994, January 28, 1995 and January 27, 1996 is net of interest
income of $1,740, $2,228, $1,838, $3,008 and $2,138, respectively. Interest
expense for the 39 weeks ended October 28, 1995 and October 26, 1996 is net
of interest income of $1,682 and $1,580, respectively.
(3) Reflects a net extraordinary charge during the 52 weeks ended January 30,
1993 due to the early extinguishment of debt, consisting of: (i) a pre-tax
charge of $6,509 associated with the redemption premiums on the Company's
senior subordinated notes and debentures; (ii) the associated write-off of
$5,179 of unamortized deferred finance costs related to the early
extinguishment of the Company's senior subordinated notes and debentures;
and (iii) the related tax benefits of $5,025 on the extraordinary charges.
(4) Reflects the cumulative effect of a change in accounting principle of $2,052
(net of tax benefits of $1,548) during the 52 weeks ended January 30, 1993
related to the adoption of new accounting standards for post-retirement
benefits.
(5) Net earnings (loss) does not give effect to preferred stock dividends.
Holders of the Company's Series C Preferred Stock were entitled to dividends
of $1,375 and $4,466 during the 52 weeks ended January 30, 1993 and January
29, 1994, respectively. Such accumulated dividends were paid from the
proceeds of the Company's initial public offering completed on October 4,
1993 (the 'IPO'). Accumulated dividends on all other series of preferred
stock outstanding for all periods were converted into Common Stock or
waived.
(6) The pro-forma weighted average number of shares outstanding used in the
computation of pro-forma earnings before extraordinary item and cumulative
effect of a change in accounting principle per common share gives effect to
an approximate 2.058-for-1 stock split completed by the Company prior to the
consummation of the IPO, the effect of certain employee stock options using
the treasury stock method, the number of shares issued upon the conversions
of preferred stock and the exercise of warrants in connection with the IPO
and the number of shares issued which is equal in value to the redemption
price of the Series C Preferred Stock, including accumulated and unpaid
dividends. Due to the Company's recapitalization in November 1992, it is not
meaningful to set forth earnings data per common share for periods prior to
the 52 weeks ended January 30, 1993.
(7) Includes discount bookstores operated under the Barnes & Noble tradename
representing the Company's original retail strategy.
(8) Comparable store sales increase (decrease) is calculated using sales of
stores that have been open for 12 months for mall bookstores and 15 months
for superstores (due to the high sales volume associated with superstore
grand openings). The comparable store sales increase (decrease) for the
period ended February 1, 1992 has been adjusted to reflect the elimination
of the 53rd week for the period ended February 2, 1991.
(9) Computed on a pro forma basis for the 52 weeks ended January 30, 1993 and
January 29, 1994. Net earnings per common share are before extraordinary
item and cumulative effect of a change in accounting principle for the 52
weeks ended January 30, 1993.
7
<PAGE>
SELLING STOCKHOLDER
The following table sets forth certain information as of the date of this
Prospectus with respect to shares of Common Stock owned by the Selling
Stockholder which are covered by this Prospectus. The number of Shares offered
pursuant to this Prospectus for the account of the Selling Stockholder equals
the total number of Shares owned by the Selling Stockholder as of the date of
this Prospectus.
<TABLE>
<CAPTION>
COMMON STOCK OWNERSHIP
PRIOR TO THE OFFERING
NAME AND ADDRESS OF -----------------------
SELLING STOCKHOLDER NUMBER PERCENTAGE
- --------------------------------------------------------------------- --------- ----------
<S> <C> <C>
Vendex International N.V............................................. 1,820,386 5.5%
DeKlencke 6, 1083HH
Amsterdam, The Netherlands
</TABLE>
PLAN OF DISTRIBUTION
The Selling Stockholder or its pledgees, donees, transferees or other
successors-in-interest may offer Shares from time to time, depending on market
conditions and other factors, in one or more transactions on the NYSE or other
national securities exchanges on which the Shares are traded, in the
over-the-counter market or otherwise, at market prices prevailing at the time of
sale, at negotiated prices or at fixed prices. The Shares may be offered in any
manner permitted by law, including through underwriters, brokers, dealers or
agents, and directly to one or more purchasers. Sales of Shares may involve (i)
sales to underwriters who will acquire Shares for their own account and resell
them in one or more transactions at fixed prices or varying prices determined at
the time of sale, (ii) block transactions in which the broker or dealer so
engaged will attempt to sell the Shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction, (iii) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account, (iv) an exchange distribution in accordance with the rules of any such
exchange, and (v) ordinary brokerage transactions and transactions in which a
broker solicits purchasers. Brokers and dealers may receive compensation in the
form of underwriting discounts, concessions or commissions from the Selling
Stockholder and/or purchasers of Shares for whom such brokers or dealers may act
as agent (which compensation may be in excess of customary commissions). The
Selling Stockholder and any broker or dealer that participates in the
distribution of Shares may be deemed to be underwriters and any commissions
received by them and any profit on the resale of Shares positioned by a broker
or dealer may be deemed to be underwriting discounts and commissions under the
Securities Act. In the event the Selling Stockholder engages an underwriter in
connection with the sale of Shares, to the extent required, a Prospectus
Supplement will be distributed, which will set forth the number of Shares being
offered and the terms of the offering, including the names of the underwriters,
any discounts, commissions and other items constituting compensation to
underwriters, dealers or agents, the public offering price and any discounts,
commissions or concessions allowed or reallowed or paid by underwriters or
dealers.
In addition, the Selling Stockholder may from time to time sell Shares in
transactions under Rule 144 promulgated under the Securities Act.
The expenses of the registration of the Shares, and all underwriting
discounts, commissions, transfer taxes and other fees, costs and expenses
relating to the sale or disposition of Shares, shall be borne by the Selling
Stockholder.
LEGAL MATTERS
Certain legal matters in connection with the Shares offered hereby have
been passed upon for the Company by Robinson Silverman Pearce Aronsohn & Berman
LLP, 1290 Avenue of the Americas, New York, New York 10104. Michael N. Rosen, a
senior member of Robinson Silverman Pearce Aronsohn & Berman LLP, is a Director
and Secretary of the Company and is deemed to be the beneficial owner of 16,000
shares of Common Stock, including 10,000 shares issuable upon the exercise of
options which are currently exercisable.
8
<PAGE>
EXPERTS
The consolidated financial statements of the Company and its subsidiaries
as of January 27, 1996 and January 28, 1995, and for each of the fiscal years in
the three-year period ended January 27, 1996, have been incorporated by
reference herein and in the registration statement in reliance upon the reports
of BDO Seidman, LLP, independent certified public accountants, incorporated by
reference herein, and upon authority of said firm as experts in auditing and
accounting.
CERTAIN FORWARD-LOOKING STATEMENTS
This Prospectus (including the documents incorporated or deemed
incorporated by reference herein) contains certain forward-looking statements
(as such term is defined in the Private Securities Litigation Reform Act of
1995) and information relating to the Company that are based on the beliefs of
the management of the Company as well as assumptions made by and information
currently available to the management of the Company. When used in this
Prospectus, the words 'anticipate,' 'believe,' 'estimate,' 'expect,' 'intend'
and similar expressions, as they relate to the Company or the management of the
Company, identify forward-looking statements. Such statements, which include,
without limitation, the matters set forth herein under the caption 'The
Company,' reflect the current views of the Company with respect to future
events, the outcome of which is subject to certain risks, including among others
general economic and market conditions, possible disruptions in the Company's
computer systems, possible increases in shipping rates or interruptions in
shipping service, effects of competition, possible disruptions or delays in the
opening of new stores, and other factors which may be outside of the Company's
control. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results or outcomes may
vary materially from those described herein as anticipated, believed, estimated,
expected or intended.
9
