As Barnes & Noble Struggles to Find Footing, Founder Takes Heat

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From The New York Times:

Leonard Riggio radically altered bookselling in America when he bought an ailing New York City bookstore and turned it into a national chain of megastores.

Now, his company — Barnes & Noble — is floundering, the publishing industry that depends on it is worried, and Mr. Riggio has nobody to turn to but himself.

That much became starkly evident last month when Barnes & Noble abruptly fired its chief executive, Demos Parneros, with little explanation. Mr. Parneros was the fourth noninterim chief executive in five years, a remarkable amount of turnover at a large company.

The news left alarmed publishers and investors complaining that the chain is once again dealing with a management vacuum when it desperately needs to adapt and innovate. Sales are falling. The Nook, Barnes & Noble’s attempt at selling electronic books, became a financial drain. Critics say the company lacks direction, sometimes seeming to prioritize sales of gifts and tchotchkes over books. For investors, the impact is already evident: Barnes & Noble’s stock price is down 60 percent over the last three years.

. . . .

“It would be disastrous if they go down,” said Dennis Johnson, a co-publisher of Melville House, an independent press. “If 600 bookstores disappear from the country, there will be that many fewer visible books, which seem to be receding from their place in the culture.”

. . . .

Mr. Riggio, 77, the company’s chairman, disputed the notion that Barnes & Noble is mired in a leadership crisis. After all, he said during an interview at the company’s headquarters on New York’s Fifth Avenue, he has always been there.

And he has a plan to turn things around.

“I have a big stake in the business, I founded it and I’ve been here forever, so I think there’s a lot of stability that comes with that,” said Mr. Riggio. “If we’re without a leader, I’m it.”

. . . .

The American Booksellers Association counted 2,470 independent store locations in 2018, up from 1,651 in 2009, and sales at its member stores were up 5 percent so far this year over last. Sales of printed hardcover books grew nearly 11 percent from 2013 to 2017, while those of paperbacks rose 17 percent, according to the Association of American Publishers.

. . . .

“The indies decided that rather than trying to compete on price and inventory, we’re going to provide our customers with a curated experience that’s hypersensitive to the customers in that community,” said Ryan Raffaelli, an assistant professor at Harvard Business School who has studied why independent bookstores are rebounding in spite of Amazon. “Barnes & Noble has struggled to figure out where they fit in the larger ecosystem, given that that continuum continues to spread further and further apart.”

To adapt, Mr. Riggio said that Barnes & Noble would close big, underperforming stores and open smaller ones in more highly trafficked areas. In the last decade, the chain has closed more than 150 stores and now operates 633.

“We have to move back to where the action is,” he said. “We have to follow the population.”

But he disagrees with another diagnosis of the problem: that he’s a micromanager who doesn’t give his chief executives room to operate. People who have worked closely with him described him as self-assured to a fault.

. . . .

[Riggio] disputed the idea that he doesn’t give his chief executives room to operate.

“I don’t micromanage anything,” he said.

. . . .

Mr. Riggio should focus less on where to close and open stores and more on how to convert browsing visitors into paying customers, Mr. Schottenfeld said.

“It’s not as much about the ideas as it is the execution of those plans — the company is mismanaging the opportunities in front of them,” he said. “It seems like you can get more dollars out of people if you just figure out what they want to buy from you.”

. . . .

Some publishing executives privately express hope that Barnes & Noble will be sold, perhaps to Indigo.

Link to the rest at The New York Times

10 thoughts on “As Barnes & Noble Struggles to Find Footing, Founder Takes Heat”

  1. “Leonard Riggio radically altered bookselling in America when he bought an ailing New York City bookstore and turned it into a national chain of megastores.”

    ‘I brought B&N into the world and I’m going to take it out.’
    (Leonard Riggio in the back of his mind. 😉 )

    • “I’m leaving it as I found it.”

      Ellis Wyatt.
      ATLAS SHRUGGED, Part 1, 2011.

      Roughly when B&N started it decline into irrelevancy.

      • Heh, he and Jeff over at Amazon both annoy the heck out of wall street by not doing what the stock boys/girls want them to do with their companies. 😉

  2. The whole article is intriguingly vague in it’s purpose. Why was this written? Did publishers go talk to Len? Did they go talk to the NYT reporter? If they are worried, why are they this worried *now*? Did the reporter just get a bee in his bonnet and decide to go talk to everyone about B&N’s prospects because… slow news day? Where is the “something happened” aspect of this story?

    Len’s not worried. He’s got a plan.

    I’m wondering if the plan is to go bankrupt and get out of all the big store leases. Now THAT would be a plan.

    • Actually, yes.
      The godfathers of the Manhattan Mafia sent an envoy to set Riggio straight and their official mouthpiece after that to make sure he got the message.

      https://the-digital-reader.com/2018/08/11/publishers-tired-of-revolving-door-in-bn-c-suite-who-isnt/

      The OP makes perfect sense in that context.
      Its the dead horse head in the bed.

      Thing is, if Riggio wanted to use bankruptcy court to get out of his leases he could have done it a while back. Instead, he got a new line of credit.

      His intent clearly isn’t chapter 11 reorganization but rather to ride that puppy all the way into liquidation.

      • “Its the dead horse head in the bed.”

        Riggio had it cleaned down to the bone and sent it back to them saying it was great! 😛

        The Manhattan Mafia aren’t sure what to try next, so they have pieces being ‘published’ about how sad/bad it is that Riggio isn’t doing right by them. Riggio is saving all this in a scrapbook and laughing his arse off at them and wall street.

  3. Not addressing the rest of the OP – but a micromanager is the last person you ask whether he or she is a micromanager. That was a fail right off the bat, there. Rather like asking an OCD person whether they have a problem (and I believe that micromanagement should probably be classified as a mental disorder in the same general area as OCD).

    • Riggio’s reply was also weird. It’s a chairman’s job to set the parameters under which his executives operate. All great corporate leaders set a style for the company they lead. People complaining about that should be dismissed out of hand. It was Riggio who brought up micromanagement. Why is he bringing focus on something negative the interviewer did not mention ?

    • Actually, some micromanagers will happily admit that they’re micromanagers because they consider that the correct way to manage (and therefore that “micromanage” is not a bad word). I actually sat on an interview panel once for such a person.

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