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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Allen Furlan who wrote (11784)	1/10/2001 9:15:32 PM
From: rjm2	Respond to of 78717

I am under the impression that the publishers take much of the risk. Indeed, they even have a discount store here where there are (used to be...havent been in a year or so) thousands & thousands of books, many with the covers removed for sale for $1. This suggests that if they return the covers, the publisher eats the cost. However, I would think that a lot of them would be on the balance sheet as an account payable. Clearly they should stop building new stores and focus on making their remaining stores profitable. But they opened a new one about 3 miles from my house a few months ago.

To: Allen Furlan who wrote (11784)	1/11/2001 12:40:48 PM
From: Bob Rudd	Read Replies (1) \| Respond to of 78717

BAMM: That inventory build caught my eye too, Allen. This from the April/2000 10-K "In general, approximately 80% of the Company's inventory may be returned by the Company for full credit, which substantially reduces the Company's risk of inventory obsolescence." While this is somewhat reassuring, I still find the inventory build concerning considering that the K covers a period ending 1/29. Book inventory that isn't readily salable requires substantial markdowns and even 20% of inventory sold at a substantial loss can be troubling. As I've indicated in prior posts, I'm on the sidelines considering reentry, having exited when Borders warned. The key for me is whether the leaders, AMZN & Barnes and Noble, have called off heavy discounting competition. The recent reporting period, citing slow sales despite heavy promotion put that thesis in doubt - but doesn't kill it, IMO.