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Barnes & Noble: death by a thousand paper cuts

1 March 2018

From The Financial Times:

Look away, bookstore lovers.

Barnes & Noble has just released its latest quarterly results, and they do not make for a pretty read.

The country’s last remaining major bookstore chain reported yet another big sales drop during the holiday quarter as consumers continued to shun brick and mortar shops and do their shopping online.

. . . .

The results come just weeks after Barnes & Noble announced a new cost-cutting plan that will see it lay off workers across its 630 stores. The company did not disclose how many of its 26,000 employees were affected.

. . . .

Sandell Asset Management, one of the company’s top investors, had urged the company to sell itself, arguing that its “unconscionably low” market value failed to reflect its status as the “one truly national bookstore chain”.

Link to the rest at The Financial Times


20 Comments to “Barnes & Noble: death by a thousand paper cuts”

  1. The analogy I’ve used before is with an aircraft. As long as it’s moving fast enough (doing enough business) it can stay in the air. Once it slows below a certain speed it falls. A plane may be flying, but once it slows below that certain speed it stalls, and once it stalls it is very difficult to get it moving forward again.

    • If you can’t rev the engines the only other way to gain momentum is to take a dive (if of course you have the altitude …)

    • DaveMich, You know nothing about aerodynamics. Your analogy is false.

      • Lift must match/beat gravity, thrust must match/beat drag.

        B&N seems to have lost any/all forward thrust. As drag slows them, they lose lift. As/if they slow too far while trying to maintain altitude they will stall and fall out of the sky.

        (Why yes, I have flown both model and full scale aircraft. 😉 )

    • Hopefully, when the plane stalls, it’s over water and you’re sitting in an exit row.

      • Too bad the floaty chair seats were one of the things they cut down on to save money (as well as inside door handles … 😉 )

  2. I’ve thought how B&N could regain me as a customer. I can’t think of a thing. Amazon does physical and digital content delivery better. Coffee shops do the coffee business better. Magazines are obsolete… music is non physical for me. There is no reason for B&N to exist for me.

  3. “its “unconscionably low” market value failed to reflect its status as the “one truly national bookstore chain”

    This is probably true. Unfortunately it’s probably a artificially high market value in relation to how it’s been managed and its future as a result

  4. Saw this: https://www.publishersweekly.com/pw/by-topic/industry-news/financial-reporting/article/76181-with-disappointging-q3-results-b-n-unveils-turnaround-plan.html?utm_source=Publishers+Weekly&utm_campaign=de220700e3-EMAIL_CAMPAIGN_2018_03_01&utm_medium=email&utm_term=0_0bb2959cbb-de220700e3-305816877

    “B&N’s new strategic plan involves four elements: strengthening the core business by enhancing the customer value proposition; improving profitability through an aggressive expense management program; accelerating execution through simplification; and innovating for the future.”

    Bingo! on the meaningless corporate-speak card.

  5. My area’s new B&N, with the coffee shop…honestly, a pretty good experience. Decent selection, and the coffee shop is a nice meeting area. Doing pretty good business, too.

    They should be getting rid of high-level MGMT, not low-level staff.

  6. I have to question what it is about being a “national” that makes it worth saving because being “national” doesn’t add any intrinsic value in my eyes.

    • Ashe Elton Parker

      The value of B&N being national, as perceived by the Tradpub companies, was that B&N was supposed to be their Angel of Salvation against the Raging Demon Amazon.

  7. I saw this coming for years. When people like myself and my sister and others I know who were weekly bookstore binge-buy junkies stop going to the bookstores weekly, then stop going monthly, then haven’t gone for months, they are in trouble. We’re not the “bestseller” buyers who buy a book a month. We were the customers who filled a basket every weekend, happily dumping a nice portion of the household budget on reads, who spent hours browsing after a dinner date, cause the bookstore was THE PLACE to go, no matter where else you went.

    When I was down to a trip for Xmas presents, once a year, I figured they were likely doomed, unless they came up with some amazing new vision for a bookstore.

    The local B&N (in an upscale neighborhood full of monied retirees with time to read and urban young professionals) closed right after Xmas in 2012. I visited one last time for the sale.

    Haven’t been in one since.

    When the hyperreaders and book-junkies don’t bother with bookstores anymore, they are in trouble, at least when it comes to selling books vs accessories and knick-knacks.

  8. Terrence OBrien

    Sandell Asset Management, one of the company’s top investors, had urged the company to sell itself,

    All they need is a buyer. They have been trying for 10 years. The last serious prospect was Liberty Media. It fell through.

    • Felix J. Torres

      They are approaching a point where their backend services (warehouses, etc) is worth more than the company. There might be more money in liquidating the company than in keeping it afloat.

      Once upon a time B&N tried to buy Ingram. Soon Ingram might be buying the valuable part of B&N.


      It was interesting to see B&N’s arguments back then.

    • Ashe Elton Parker

      You know what would be really amusing? If Amazon bought B&N. Just imagine the ADS that would strike all those B&N shareholders and Tradpub employees at having their last great hope for stemming the tide of change being bought by the company they hate.

  9. I haven’t been to our local B&N in years, probably five or more. There’s nothing there for me. Seriously. Don’t care about sitting in a cafe doing… whatever it is people are doing there. None of the books they have interest me. I can’t stand any of the magazines they stock (none are about my hobbies, which I could at least get at the Books-a-Million), and over-priced toys and gifts? Please.

    What they should do is focus on being a bookstore. Forget all the other crap. Stock things that would interest people in the area. Stop having the clerks trying to up-sell you on some ridiculous membership deal. Hire people who know the stock and can actually help you pick books.

    And be a raging warrior online against Amazon. Let indies take the front line, the way the Zon did when they first started. Make the system easy to use. Make us want to upload there, not just as a protest against Amazon, but as a vibrant marketplace. ADS is killing the company, and their slavish adherence to the trad pubs aren’t helping.

    But honestly, it’s too little, too late, whatever they do. Might as well keep some dignity and go out gracefully, if not profitably.

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