Barnes & Noble To Acquire Sterling Publishing; One of The Industry's Fastest Growing Publishers.

Business Editors

NEW YORK--(BUSINESS WIRE)--Dec. 12, 2002

Barnes & Noble, Inc. (NYSE: BKS), the world's largest bookseller, today announced that it has reached an agreement to purchase Sterling Publishing, one of the top 25 publishers in America and the industry's leading publisher of how-to books, for an undisclosed amount.

"We are very excited about this acquisition, because it brings two companies together with very similar publishing visions," said Steve Riggio, chief executive officer of Barnes & Noble, Inc. "Sterling has a winning combination of superior content and value pricing. They have their finger on the pulse of what American consumers buy, and it directly overlaps many of Barnes & Noble's strongest categories. We believe that the strengths of each company will enable us to maximize value out of our respective retail and publishing enterprises. We expect this acquisition will enhance the earnings of Barnes & Noble, as it will be a catalyst to driving sales growth in our stores via the publication and promotion of exciting and highly profitable titles that represent exceptional value to our customers. Additionally, Sterling's well-developed sales force gives us an immediate solution to distributing Barnes & Noble publications to the trade and special markets."

According to Mr. Lincoln Boehm, the owner of Sterling Publishing, "Barnes & Noble will be a wonderful home for our great employees, our solid authors, and our strong group of distribution clients. The Barnes & Noble brand is one of the best recognized in the U.S., and the company has some exciting ideas for expanding our publishing programs and continuing our growth."

Sterling Publishing has achieved robust growth over the past decade and, despite a sluggish book market, has realized double-digit increases over the past two years. With an active list of more than 4,500 titles, it publishes more than 1,000 new titles annually. As the world's leading publisher of how-to books, Sterling has exceptional strength in art technique, gardening, cooking, health, crafts, and house and home. In 2002, Sterling signed a long-term agreement with Hearst Books, under which it has exclusive rights to Hearst's current titles, including perennial bestsellers, such as "The Good Housekeeping Cookbook" and "Chapman's Piloting." The companies are also jointly developing an extensive publishing program based upon content from Hearst's strong list of branded magazines, including "Good Housekeeping," "Country Living," "Victoria," "Popular Mechanics" and "Esquire."

Barnes & Noble said that Sterling Publishing would remain a separate business unit, with its present management in place. The acquisition is expected to close within 45 days and is subject to Hart-Scott-Rodino clearance.

ABOUT BARNES & NOBLE, INC.

Barnes & Noble, Inc. (NYSE: BKS) is the world's largest bookseller, operating 620 Barnes & Noble bookstores in 49 states. It also operates 281 B. Dalton Bookseller stores, primarily in regional shopping malls. The company offers titles from more than 50,000 publisher imprints, including thousands of small, independent publishers and university presses. It conducts its e-commerce business through Barnes & Noble.com (http://www.bn.com) in which it owns an approximate 36% interest.

Barnes & Noble also has approximately a 60% interest in GameStop (NYSE: GME), the nation's largest video-game and entertainment-software specialty retailer with 1,200 stores.

General financial information on Barnes & Noble, Inc. can be obtained via the Internet by visiting the company's corporate Web site: http://www.barnesandnobleinc.com/financials.

ABOUT STERLING PUBLISHING CO., INC.

Sterling is one of the world's leading publishers of nonfiction titles with over 4,500 books in print. Among its best-selling titles are "Biggest Riddle Book in the World," "The Illustrated Dream Dictionary," and "Windows on the World Complete Wine Course." With an unusual title and packaging, "Yoga for Wimps" became an in-house bestselling title in 2001, and marked the launch of an ongoing series.

SAFE HARBOR 

This press release contains "forward-looking statements." Barnes & Noble is including this statement for the express purpose of availing itself of the protections of the safe harbor provided by the Private Securities Litigation Reform Act of 1995 with respect to all such forward-looking statements. These forward-looking statements are based on currently available information and represent the beliefs of the management of the company. These statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks include, but are not limited to, general economic and market conditions, decreased consumer demand for the company's products, possible disruptions in the company's computer or telephone systems, possible work stoppages or increases in labor costs, possible increases in shipping rates or interruptions in shipping service, effects of competition, possible disruptions or delays in the opening of new stores or the inability to obtain suitable sites for new stores, higher than anticipated store closing or relocation costs, higher interest rates, the performance of the company's online and other initiatives, the successful integration of acquired businesses, unanticipated increases in merchandise or occupancy costs, unanticipated adverse litigation results or effects, product shortages, and other factors which may be outside of the company's control. Please refer to the company's annual, quarterly and periodic reports on file with the SEC for a more detailed discussion of these and other risks that could cause results to differ materially.