Barnes and Noble

Barnes & Noble does business -- big business -- by the book. As the #1 bookseller in the US, it operates about 650 superstores throughout 49 states and the District of Columbia under the banners Barnes & Noble, Bookstop, and Bookstar, as well as about 200 mall stores using the names B. Dalton, Doubleday, and Scribner's. The company's GameStop subsidiary is the #1 US video game retailer with about 1,500 stores under the names Babbage's Etc., GameStop, and FuncoLand. Barnes & Noble owned about 75% of online book seller barnesandnoble.com after purchasing Bertelsmann's interest in 2003; Barnes & Noble then purchased all remaining shares and took the company private in May 2004.

Barnes & Noble dates back to 1873 when Charles Barnes went into the used-book business in Wheaton, Illinois. By the turn of the century, he was operating a thriving bookselling operation in Chicago. His son William took over as president in 1902. William sold his share in the firm in 1917, to C. W. Follett, who later built Follett Corp, and moved to New York City, where he bought an interest in established textbook wholesalers Noble & Noble. The company was soon renamed Barnes & Noble. It first sold mainly to colleges and libraries, providing textbooks and opening a large Fifth Avenue shop. Over the next three decades, Barnes & Noble became one of the leading booksellers in the New York region.

Freshman Leonard Riggio, who worked at a New York University bookstore to help pay for night school. He studied engineering but got the itch for bookselling. In 1965, at age 24, he borrowed $5,000 and opened Student Book Exchange NYC, a college bookstore. Beginning in the late 1960s, he expanded by buying other college bookstores.

In 1971 Riggio paid $1.2 million for the Barnes & Noble store on Fifth Avenue. He soon expanded the store, and in 1974 he began offering jaw-dropping, competitor-maddening discounts of up to 40% for best-sellers. Acquiring Marboro Books five years later, the company entered the mail-order and publishing business.

By 1986 Barnes & Noble had grown to about 180 outlets, which included 142 college bookstores. Along with Dutch retailer Vendex, that year it bought Dayton Hudson's B. Dalton mall bookstore chain, forming BDB Holding Corp. In 1989 the company acquired the Scribner's Bookstores trade name and the Bookstop and Bookstar superstore chain. BDB began its shift to superstore format and streamlined its operations to integrate Bookstop and Doubleday (acquired in 1990) into its business.

BDB changed its name to Barnes & Noble in 1991. With superstore sales booming, the retailer went public in 1993 (the college stores remained private). It bought 20% of Canadian bookseller Chapters (now Indigo Books) in 1996 (then sold in 1999).

The bookseller went online in 1997, and in 1998 sold a 50% stake in its Web operation subsidiary to Bertelsmann (which it re-purchased in 2003) in an attempt to strengthen both companies in the battle against online rival Amazon.com.

Also in 1998 Barnes & Noble agreed to buy #1 US book distributor Ingram Book Group, but the deal was called off in 1999 because of antitrust concerns. Also in 1999 barnesandnoble.com went public and Barnes & Noble bought small book publisher J.B. Fairfax International USA, which included coffee-table book publisher Michael Friedman Publishing Group. Later that year the company bought a 49% stake in book publishing portal iUniverse.com (later reduced to 22%). It also bought Riggio's financially struggling Babbage's Etc., a chain of about 500 Babbage's, Software Etc., and GameStop stores, for $215 million.

The company's Babbage's Etc. subsidiary (renamed GameStop, Inc.) acquired video game retailer Funco for $161.5 million in 2000. In 2001 Barnes & Noble