Bookstores

Barnes & Noble -5% after sluggish earnings

20 November 2018

From Seeking Alpha:

Barnes & Noble (NYSE:BKS) is down 5.3% after the company reports Q3 earnings.

Revenue was down 2.5% during the quarter and comparable sales were off 1.4%.

Only a few analysts are covering B&N these days, meaning that the company’s earnings beat holds a bit less weight. Still, the EBITDA loss of $2.3M compares favorably to the consensus mark of -$12.1M.

Link to the rest at Seeking Alpha

PG suggests the lack of analysts covering Barnes & Noble is an indication of how much the company has shrunk and how few investors are interested it anything it does.

Attorneys for Parneros, Barnes & Noble Meet in Court

14 November 2018

From Publishers Weekly:

At a 20-minute initial conference, lawyers for Demos Parneros portrayed the fired CEO as a respected executive who is now “unhirable” after being wrongly dismissed for alleged sexual harassment. Lawyers for Barnes & Noble said they have “a different view of the facts.”

. . . .

In the brief opening conference, [Judge] Koeltl asked attorneys for each side if they’d be willing to at least confer about a settlement with the help of a magistrate judge. And while neither side sounded optimistic about a deal (Parneros’ attorney Anne L. Clark told the court that settlement discussions had been broached at one point but “didn’t get far”) neither side offered “an unequivocal no,” Koeltl observed, prompting him to say he would refer the parties to U.S. Magistrate judge Gabriel Gorenstein for a settlement conference. The signed scheduling order gives the parties until December 3 to notify the court “if such a referral would be useful for purposes of a settlement.”

Koeltl also suggested the two sides consider waiving the jury waiver clause in Parneros’s employment contract, and proceed with a jury. The litigation is currently proceeding as a non-jury case.

. . . .

In today’s 20-minute hearing, Clark portrayed Parneros as a respected, once heavily recruited executive who is now “unhirable” after being wrongly dismissed for alleged sexual harassment. Clark reiterated Parneros’s claim that he did not sexually harass anyone, and said that an incident with an executive assistant cited as the basis for his firing had been “resolved” in-house prior to his dismissal. Parneros, Clark said, also denies being abusive toward other members of the Barnes & Noble’s executive team.

Link to the rest at Publishers Weekly

Barnes & Noble Opens a Small Bookstore

14 November 2018

From Washington Business Journal:

Barnes & Noble Inc. will open a smaller store at Edens’ Mosaic District, joining a slate of new retailers and restaurants at the Merrifield project including a whiskey bar and a stationary store.

The Barnes & Noble, slated to open in June, will take up 8,630 square feet at 2921 District Ave., according to a contractor bid site. The book store will be significantly smaller than the traditional Barnes & Noble and even half the size of its recently opened One Loudoun concept, home to a quick-service restaurant.

Going small? That appears to be the Barnes & Noble plan.

Leonard Riggio, the founder and chairman, said in September on the company’s first quarter 2019 earnings call that “we’re prototyping stores maybe as little as 8,000 to 10,000” square feet. Most of its recent stores are in the 10,000 to 14,000-square-foot range.

Link to the rest at Washington Business Journal

Barnes & Noble drops new ads doubling down on brick and mortar

11 November 2018

From Campaign US:

Barnes & Noble has launched its first major campaign in years after Havas North America won a competitive pitch to own creative and media duties.

The work, entitled “Nobody Knows Books Like We Do,” is the brand’s reminder of the joy and discovery bookstores can bring us in a world dominated by digital.

“Our biggest challenge is that people are busy and don’t have the same amount of time they once had to read,” Tim Mantel, Barnes & Noble’s chief merchandising officer told Campaign US. “We’re competing with how busy people are in their own lives, as well as all the entertainment and information they can get right in the palm of their hand.”

He explained: “Barnes & Noble has always been an incredible place of discovery, whether it’s for people shopping for themselves, or looking for a thoughtful gift for someone they care about. This campaign gives us the chance to remind our customers around the country of what a special place our stores are, and how amazing it is to come into a Barnes & Noble to find just the right book or gift during the holidays.”

. . . .

The brand’s 23,000 booksellers live at the heart of this campaign. It is these people who are the key point of differentiation between Barnes & Noble and digital giants like Amazon, “because they can help customers find the perfect book in a way that can’t happen online.”

Mantel said the bookseller is leveraging its brick and mortar status as community centers, whether its attending a book club, bringing a child to a Storytime, or dropping by for a cup of coffee.

“As the campaign shows, going to your local Barnes & Noble is not just about discovering life-changing books and gifts, but interacting with people and communities in a way that can’t happen in front of a computer,” he added.

Link to the rest at Campaign US and thanks to Dave for the tip.

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Barnes & Noble’s Mystery Suitor Was U.K. Retailer WH Smith

6 November 2018

From The Wall Street Journal:

When Barnes & Noble Inc.’s former chief executive sued the company in August over his dismissal, a tantalizing detail stood out in his complaint.

The struggling book retailer was on the verge of selling itself this past spring, he said, and had even accepted an offer. For months, people in the publishing industry wondered about the identity of the mystery would-be buyer.

Link to the rest at The Wall Street Journal and thanks to Dave for the tip.

New Cafe Opens for Food, Drinks, Books and Political Activism

6 November 2018

From Eater San Francisco:

Emanuel “Manny” Yekutiel has always been busy before big elections. In 2012, he worked on Obama’s reelection campaign (and later interned at the White house), and in 2016 it was the campaign to elect Hillary Clinton. But ahead of Tuesday’s midterm, he’s been occupied with something new: Opening Manny’s, a 3,000-square-foot cafe, bar, bookstore, and civic gathering space at 3092 16th Street. After more than a year of construction on the corner of Valencia (in the former V16 Sushi space), Manny’s will greet its first customer on November 6th.

That timing isn’t just fitting, but intentional: Yekutiel envisions Manny’s as just the kind of place you’d want to watch election results roll in. It’s “a new physical place to go to become a better informed and more involved citizen,” he says.

In an era when most of us engage with the news alone (Yekutiel gestures to his phone) he wants to bring people together to commiserate and organize in real life. “There’s something necessary about an in-person connection,” he says.

. . . .

Nearby bookstore Dog Eared books will provide Manny’s with political reading material, stocking floor-to-ceiling shelves in a central bookstore space. Food offerings will be implicitly political, too, according to Kevin Madrigal, co-founder and culinary director of Farming Hope. His nonprofit — which provides transitional work in its gardens and training in the culinary industry to people experiencing homelessness and poverty — will handle the menu at Manny’s.

“When people buy something here, they’ll be supporting what we do [at Farming Hope], whether knowingly or unknowingly,” Madrigal says.

. . . .

Behind the cafe . . . is a large event space with room for about 107. In that space, there’s more seating, two TVs (to be tuned to news), a large projector, and lots of board games.

While Manny’s itself is new, its idea is anything but. “For centuries there have been certain cafes, bars, and restaurants that have doubled as spaces for civic engagement, social justice, and activism,” says Yekutiel, “places to consume, react, and create the news.”

The first coffee houses in the Ottoman Empire and cafes in France fomented revolutions, he observes, while Compton’s Cafeteria in San Francisco and the Stonewall Inn in Greenwich Village kickstarted the movement for gay rights. Madrigal points to Mitla Cafe in San Bernardino, where organizers in the 1940s organized to sue the city for access to public pools — an action that helped set precedent for Brown vs. Board of Education.

So will the next revolution get started at Manny’s?

“It’s already happening,” says Madrigal.

. . . .

To succeed, Manny’s will need to have some kind of activity almost every night — “Just like a movie theater doesn’t work if it’s not showing movies every night, or a sports bar doesn’t work if it’s not showing a game,” says Yekutiel.

But what that activity entails is flexible, from phone banking to watching documentaries to drinking beer and making art.

Link to the rest at Eater San Francisco

For visitors from outside the United States, today is the first general election for federal legislators – Senators and Representatives – since the election of President Trump.

President Trump is not on the ballot, but the level of political activity over the past few months has been very high and, for some observers, excessively frenetic.

Regardless of the outcome of today’s elections, PG suspects he is not the only one who looks forward to a post-election period that includes a civic life that is a bit more unperturbed.

On the other hand, Manny’s marketing plan appears to be built on a foundation of continuous perturbation.

Among the extensive list of topics about which PG claims no expertise, San Francisco restaurants would rank near the top (although, during past lives, he has enjoyed more than one excellent restaurant meal in that city).

Despite the “implicitly political” nature of his menu, PG will observe that Manny appears to manifest the promotional instincts and behavior of an eager capitalist entrepreneur.

What’s the Matter with Fiction Sales?

4 November 2018

From Publishers Weekly:

According to 2017 estimates released this summer by the Association of American Publishers, sales of adult fiction fell 16% between 2013 and 2017, from $5.21 billion to $4.38 billion. The numbers, though not a major worry, raise questions about the books the industry is publishing and what consumers want to read.

Since 2013, fiction sales fell every year with the exception of 2015. That year they rose 1%, helped by Harper Lee’s Go Set a Watchman and three other novels that topped one million print copies sold. (The AAP tracks all major formats—print, digital, and audio—in its sales estimates.) Interviews and discussions with various industry members uncovered different theories about why there’s been a downturn in fiction.

The most commonly shared view is that it has become extremely difficult to generate exposure for novels. Fiction, more than nonfiction, depends on readers discovering new books by browsing. Now, with the number of physical stores down from five years ago (despite a rise in ABA membership), publishers cannot rely on bricks-and-mortar stores providing customers with access to new books.

Nor can publishers depend on media outlets to make up for the gap left by the shrinking footprint of physical bookstores. Review space in mainstream media has been slashed, cutting off another possibility for readers to learn about new fiction.

The upshot of those developments is that publishers have found breaking out new writers—never mind developing new franchise authors—increasingly difficult.

Creating authors who can draw readers via name recognition alone is crucial to selling novels. Research done by the Codex Group shows that the author is the most important factor in a person’s decision to buy a novel. Codex founder Peter Hildick-Smith says that with so much inexpensive genre fiction now available at “subprime price points under $5” (from such channels as Kindle Unlimited), publishers must invest to develop brand name authors who can command premium-price loyalty.

That process can require a multiple-book commitment. It can also require a type of commitment that’s difficult for publishers: sticking with authors who don’t produce instant bestsellers.

Based on Codex research, a person typically reads an average of three books by an author before becoming hooked on his or her books. Publishers, however, as Hildick-Smith and others interviewed noted, seem increasingly reluctant to support authors whose books don’t immediately sell. “Creating a dependable, bestselling author is a multibook investment that requires different strategies and great persistence,” Hildick-Smith said. “It’s not a one-and-done launch.”

The difficulty publishers have recently had in creating brand name authors can be seen in BookScan numbers. The service, which tracks only print sales, shows that fiction sales continue to be soft. Moreover, the BookScan figures show that no fiction title topped one million copies sold in 2016 or 2017 at outlets that report to the service. In 2015, the only year in the past five when fiction sales rose over the previous year, four novels sold more than one million print copies each, according to BookScan: Watchman (1.6 million), Grey by E.L. James (1.4 million), The Girl on the Train by Paula Hawkins (1.3 million), and Anthony Doer’s All The Light We Cannot See (one million).

Link to the rest at Publishers Weekly

Attentive readers will note the single mention of Amazon – Kindle Unlimited, associated with “subprime price points under $5”. Traditional publishers can’t and won’t compete in that market, preferring authors and books with “premium-price loyalty”.

PG suggests that category title is not properly worded. Instead, he believes that traditional publishers are trying to promote authors and books that attempt to command “over-priced loyalty” from readers.

As readers come to understand that most of the money they pay for traditionally-published books goes to middle-folk like bookstores and publishers with very little trickling down to authors, their loyalty to premium pricing may erode.

Barnes & Noble Countersues Fired CEO

2 November 2018

From icv2.com:

Barnes & Noble filed a counterclaim this week against Demos Parneros, its fired CEO, alleging that he intentionally scuttled an acquisition of the company by another book retailer to preserve his job.

The counterclaim was in response to a suit by Parneros for breach of contract and defamation related to his termination for cause . . . in which he sought the payment of severance and damages.

B&N’s counterclaim tells the story of the acquisition negotiations, which began in late January with a call from the CEO of the potential acquiror (which has been identified only as a book retailer) to company Chairman (and largest stockholder) Leonard Riggio.  During the subsequent negotiations, according to the counterclaim, Parneros expressed opposition to the deal internally, tried to restrict information going to the potential acquiror, and worked to keep interaction to limited times.   Two meetings loomed large in the narrative.

In a March meeting, Parneros reportedly described Barnes & Noble as “spiraling” and “ugly” and questioned his decision to join the company.  Despite those characterizations, the potential acquiror did make an offer in April, and sent a higher offer in late May.

On June 18, a meeting was held at the request of the potential acquiror, which asked for an explanation for a recent sales decline.  At the meeting, Parneros gave what the counterclaim described as a “long, rambling monologue, which failed to address the issues and questions posed by the Potential Acquiror and, instead, portrayed the Company in an extremely and unduly negative light, with no realistic prospects for success.”

The complaint continued, “Among the many shocking and disparaging statements Parneros made during the meeting, he described the Company as an ‘ugly mess’ and complained that the Company had ‘no talent’ before he arrived.”

Link to the rest at icv2.com

PG suspects this litigation will end up disclosing a lot of negative information about Barnes & Noble. If Riggio really wanted to sell the company for a good price, he would have paid the termination fee called for in Paneros’ employment agreement, thereby insuring his silence and moved full speed towards a sale.

The lawsuit will almost certainly deter potential purchasers who are not bottomfeeders looking for a bargain price. Unless the case is settled, the executives of the potential acquiring company are going to be involved in this lawsuit and required to provide evidence about what Paneros did or did not do and end up being called liars by one or both sides.

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