From Shelf Awareness:
In the third quarter ended January 27, total sales at Barnes & Noble fell 5.3%, to $1.2 billion, and the consolidated net loss was $63.5 million, compared to net earnings of $70.3 million in the same period a year earlier.
In the quarter, sales at stores open at least a year fell 5.8% “primarily due to lower traffic.” The company noted that in January, comp-store sales fell 3.5%, a slight improvement.
“While we were disappointed with our holiday sales, comparable store sales trends did improve in January,” said B&N CEO Demos Parneros. “We have initiated a strategic turnaround plan that is centered on growing the business and enhancing shareholder value. In the short term, we are focused on stabilizing sales, improving productivity and reducing expenses. Achievement of our longer-term goals requires a significant multi-year transformation. We expect our plan to provide consistent improvement beginning in fiscal 2019 and beyond.”
Last month, B&N began what it called “a companywide expense reduction plan,” which included the layoffs of an undisclosed number of booksellers.
Link to the rest at Shelf Awareness
PG notes a history of failures in BN’s turnaround plans. He has previously posted about Barnes & Noble’s recent extensive layoffs.
As PG has written before, he’s sorry when anybody loses their job and mass layoffs are the most effective way he knows for a company to lose its best employees.
Revolving door top management with the new CEO knowing less about the book business than the old CEO are an indication for PG of a company that doesn’t know what to do.
Leonard S. Riggio, the chairman and largest shareholder, who bought the company in 1971 (and still makes the biggest decisions), had a good run for a while, notably pricing a lot of smaller bookstores out of business, but, like many people, has never figured out how to compete with Amazon.
A well-known quote about bankruptcy from Ernest Hemingway’s The Sun Also Rises comes to mind:
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
“What brought it on?”
“Friends,” said Mike. “I had a lot of friends. False friends. Then I had creditors, too. Probably had more creditors than anybody in England.”
For many years Barnes & Noble was the terror of the book industry, driving countless small bookstores out of business through aggressive price-cutting (see You’ve Got Mail), so its current financial quandary has more than a little of “What goes around, comes around” playing in the background.
As Amazon grew and the second largest bookstore chain, Borders, suddenly collapsed, Barnes & Noble was cast as the savior of the traditional book business, the only power that could support high-priced printed books and beat back Amazon, the scourge of Big Publishing (and the friend of readers who didn’t live in Manhattan with low prices and a wide variety of books which could electronically appear in Cut Bank, Montana, faster than they could be physically purchased at any Barnes & Noble store, even if you skipped the tchotchkes in the checkout line).
Times changed, Barnes & Noble didn’t. PG isn’t the only one who knows the end of that story.