Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Jan Crawley who wrote (70128)	7/27/1999 8:26:00 PM
From: H James Morris	Read Replies (1) \| Respond to of 164684

Jan. do remember B&T? >> Washington DC, July 27 (Bloomberg) -- Baker & Taylor Corp., seeking to capitalize on its behind-the-scenes role in supplying books to online merchants such as Amazon.com Inc., filed to raise $70 million through an initial public offering. Amazon.com is the Internet retailer that claims to be the world's largest bookstore, with some 4.5 million book titles available. However, there's more to this boast than meets the eye. Online retailers such as Amazon.com offer consumers an extensive selection and speedy delivery in part by filling customer orders through wholesale distributors such as Baker & Taylor & Ingram Book Group. Based in Charlotte, North Carolina, Baker & Taylor stocks 250,000 book titles and can ship orders -- under Amazon,com's name -- to most consumers within a day. ''Amazon.com never would have been able to do what it did without Baker & Taylor and Ingram,'' said Richard Howorth, the president of the American Booksellers Association in Tarrytown, New York. Baker & Taylor is one of two national book wholesalers, ranked second in size only to Ingram. In addition to books, Baker & Taylor also wholesales videos and music, supplying inventory to companies such as CDnow Inc. Traditionally known for selling to libraries, Baker & Taylor in recent years has increasingly catered to retailers. The move has been most pronounced in the online realm, as Baker & Taylor more than quadrupled sales to Internet bookstores during its most recent fiscal year. Distribution Systems The company is seeking to integrate its distribution systems and expand warehouse capacity, moves that will be financed in part through the first-time stock sale. The expansion, scheduled for completion in November at a cost of $50.5 million, will increase warehouse space by 60 percent and shipping capacity by about 70 percent. ''The facilities integration gives us the ability to ship books, videos and music products in the same box'' to retailers or consumers, Baker & Taylor said in a registration statement filed with the Securities and Exchange Commission. ''We believe that this capability will give us a competitive edge in supplying Internet-based customers.'' Sales to Internet retailers were the fastest growing part of Baker & Taylor's business last year, rising to $165.9 million for the year ended June 25, 1999, from $38.5 million one year earlier. On the whole, net sales increased 15.6 percent to $1.02 billion in fiscal 1999 from $883.2 million the year before. Net income from operations rose to $36.8 million in fiscal 1999 from $914,000 the year before. However, the 1999 figure includes a $33.9 million gain on investments, including gains recorded on Amazon.com shares held by Baker & Taylor. In one sense, Baker & Taylor's pursuit of Internet sales comes at an odd time. That's because several major online retailers are trying to develop their own distribution capability, a step that would reduce their reliance on wholesalers such as Baker & Taylor. Shopping Season For instance, Barnes and Noble Inc., the parent to online bookseller barnesandnoble.com inc., scrapped a plan earlier this year to buy Ingram because the transaction faced opposition from the Federal Trade Commission. Amazon.com is developing a network of 7 distribution centers that will give the online company about 3.5 million square feet of space in time for the 1999 holiday shopping season. ''More and more you are seeing a shift towards buying direct (from publishers) at Amazon,'' said Lizzie Allen, a spokeswoman for the Internet retailer. Nevertheless, Amazon.com's sales, while growing quickly, represent less than two percent of the overall book market, according to Howorth of the American Booksellers Association. That means there is plenty of other online retailers for Baker & Taylor to serve. The company's registration statement didn't disclose how many shares Baker & Taylor plans to sell or the price it will seek for each share. These details will be included in a supplemental filing with the SEC. Craig Richards, the chief executive of Baker & Taylor, served as a managing director at the investment bank Bear, Stearns & Co. Inc. from November, 1986, to May, 1992. Not surprisingly, Bear Stearns will underwrite the stock sale along with Donaldson, Lufkin & Jenrette and Credit Suisse First Boston.<<