Barnes & Noble reports it overstated losses in past years(Read article summary)
Barnes & Noble says it lost less money than it previously reported during the past two years.
It turns out that Barnes & Noble lost less money than the company thought.
The struggling bookseller says it overstated the amount of money it lost during 2011 and 2012 by $9 million. The actual loss during that period was $134 million, and not $143 million as the company had previously reported.
In addition, in 2010, the company had earnings of $43 million rather than $37 million.
Barnes & Noble said the errors were the result of “inadequate controls over the accrual reconciliation process at its distribution centers.”
As suggested by the website Crain’s New York Business, the fact that Barnes & Noble bought more warehouses to fill customer demand more quickly could mean that accounting was unable to keep pace with the amount of business being conducted.
“When you ramp up distribution centers like Barnes & Noble did it really puts pressure on internal control systems, in my experience,” Villanova University School of Business professor Anthony Catanach told Crain’s New York Business.
Barclays analyst Alan Rifkin said the news didn’t inspire confidence.
“Today’s restatement is problematic, in our view, because it suggests that Barnes & Noble itself was unable to properly account for the complexities of its business model,” Rifkin told the Wall Street Journal.
The company also recently announced it was seeking a partner for its Nook business. B&N’s CEO William Lynch resigned earlier this month following dismal numbers for the bookseller’s fourth quarter.