Declare the Strand Bookstore a City Landmark? No Thanks, the Strand Says

5 December 2018

From The New York Times:

Since it opened in 1927, the Strand bookstore has managed to survive by beating back the many challenges — soaring rents, book superstores, Amazon, e-books — that have doomed scores of independent bookshops in Manhattan.

With its “18 Miles of Books” slogan, film appearances and celebrity customers, the bibliophile’s haven has become a cultural landmark.

Now New York City wants to make it official by declaring the Strand’s building, at the corner of Broadway and 12th Street in Greenwich Village, a city landmark.

There’s only one problem: The Strand does not want the designation.

Nancy Bass Wyden, who owns the Strand and its building at 826 Broadway, said landmarking could deal a death blow to the business her family has owned for 91 years, one of the largest book stores in the world.

. . . .

Like many building owners in New York, Ms. Wyden argues that the increased restrictions and regulations required of landmarked buildings can be cumbersome and drive up renovation and maintenance costs.

“By landmarking the Strand, you can also destroy a piece of New York history,” she said. “We’re operating on very thin margins here, and this would just cost us a lot more, with this landmarking, and be a lot more hassle.”

That the Strand could be threatened by its own preservation seems like a plot twist worthy of one of its books, she said: The very agency entrusted with preserving the city’s treasures is endangering one of them.

Another rich twist, Ms. Wyden said, was that the move coincides with the announcement that Amazon — not exactly beloved by brick-and-mortar booksellers — plans to open a headquarters in Queens, after city and state leaders offered upwards of $2 billion in incentives to Amazon and its multibillionaire chief executive, Jeff Bezos.

. . . .

“The richest man in America, who’s a direct competitor, has just been handed $3 billion in subsidies. I’m not asking for money or a tax rebate,” Ms. Wyden said. “Just leave me alone.”

. . . .

Owners of buildings with landmark status are in many cases barred from using plans, materials and even paint colors that vary from the original design without the commission’s approval.

. . . .

“Usually I’m on the side of the preservationists, but in this case, I agree with Nancy, because I know the Strand is a store, but it’s really a cultural institution that’s essential to the city,” she said. “And to put that” — meaning, landmark restrictions — “on top of a bookstore is just not fair.”

But Peg Breen, the president of the New York Landmarks Conservancy, an advocacy group, said she believed the Strand’s concerns were unfounded.

“No one is doing this to hurt the Strand, or add difficulties,” she said. “They’re doing it to honor the building.”

. . . .

Ms. Wyden — who is married to Senator Ron Wyden of Oregon, whom she met at the similarly renowned Powell’s book store in Portland — is a third-generation owner of the Strand, which stocks roughly 2.5 million used, rare and new books and employs 230 people.

Her grandfather Benjamin Bass opened the Strand in 1927 on Fourth Avenue’s “Book Row,” which was lined with nearly 50 bookstores. Her father, and Benjamin’s son, Fred Bass, took over the business and worked there until his death in January at age 89.

The family moved the Strand to its current location in 1957 and rented space for decades before buying the building in 1996 for $8.2 million to ensure survival amid rising rents, Ms. Wyden said. The city assessed the building’s value at over $31 million in January.

Though landmark designation is often used to protect buildings from demolition or significant alteration, Ms. Wyden said she has no intention of selling to a developer, and is already restricted by existing zoning from further developing the building.

Link to the rest at The New York Times

This holiday season could seal Barnes & Noble’s fate

1 December 2018

From CNBC:

This could be the most crucial holiday season in Barnes & Noble’s history.

Its sales have been in a decline for six years as the bookseller cedes market share to Amazon and consumers turn to their phones or portable tablets instead of books. There’s been a revolving door in the retailer’s C-suite, and activist investors have piled on. Now, Barnes & Noble is considering a sale of its business after receiving interest from a handful of parties, including its founder and executive chairman, Leonard Riggio, and reportedly, U.K. retailer W.H. Smith.

Barnes & Noble must prove it can deliver sales growth in its core book business this holiday season. The retail industry as a whole is expected to benefit from strong consumer spending, with the average American household expected to spend $1,536 through the holidays, according to a survey by Deloitte. That’s up 25 percent from a year ago. If Barnes & Noble can’t grow sales against such a healthy, economic backdrop, the company could ultimately head down the same path as its former rival Borders, or shuttered Toys R Us or Sears, which is in bankruptcy court.

All things considered, Barnes & Noble still has high hopes ahead of the holidays.

“We’ve done a lot of things this year to try to put ourselves on the right track and to get our comp-store sales number to head in the positive direction,” Riggio told CNBC. “And we are hoping that that comes — we are planning for it to come — during this holiday season.”

. . . .

Last holiday season, the bookseller’s sales tumbled more than 6 percent, with e-commerce sales also in the red. After the dismal results, the company slashed its staff.

Now, it has a new plan in place for this year. In a new ad campaign that’s being rolled out this week in movie theaters and on cable television, Barnes & Noble touts its more than 20,000 current employees, along with their knowledge of books, as reasons why its stores are unique. “Nobody Knows Books Like We Do” is the message of the campaign, which will run though the middle of January.

Barnes & Noble also will be testing roughly 10 to 15 store layouts during the holidays, featuring different spreads of merchandise, to see what sticks.

“We have a lot of things out there in test form,” Riggio said. “Retail is all about that. … If you’re smart, you conduct tests during the holiday season, and that informs you how to run the next holiday.”

. . . .

Within just the past five years, Barnes & Noble has lost more than $1 billion in market value. Its shares have fallen about 4 percent from a year ago, having spiked more recently on deal speculation, and now trade under $7.

“To have a company with a small market cap is somewhat problematic,” Riggio said. “Our market cap is an indicator that we should be a private business.”

. . . .

Amazon all the while has managed to take almost 50 percent of new book sales, according to Codex Group, a book audience research firm. While it doesn’t break out Barnes & Noble’s share, Codex says Walmart has about 4.2 percent of the new book market, tied with the category of independent booksellers, which after a period of decline are staging a comeback.

. . . .

More recently, however, analysts say Barnes & Noble has struggled from perhaps innovating too much. It’s tested restaurants called “The Kitchen,” but the concept proved too expensive to grow at scale. It still has just five of these eateries, offering $12 avocado toast and $16 brisket burgers. “The top line on our restaurants is good. The bottom line is awful,” Riggio said on a recent earnings call.

America’s independent book chains, meanwhile, are gaining their footing again by sticking to what’s simple and what they know best — selling books. There are still more than 2,300 independent book stores in the U.S., according to the American Booksellers Association.

. . . .

“This is a very fragile industry now,” Codex Group CEO Peter Hildick-Smith said. “Our data is suggesting a lot of the books business today is behind the Amazon curtain.” He said more than two-thirds of all books sold on a unit basis are now transacted online.

Taking note of this trend, Riggio has said investments online will be the company’s next priority. Still, he explained, “the magnitude of what the Amazons and the Apples and the Googles can achieve in terms of technology is so far beyond that which we could achieve, we’ve really got to carve out a space for ourselves. … We can’t do it all.”

Link to the rest at CNBC

Here’s How It Will Go

1 December 2018

From The Layoff:

B&N will struggle through the holiday, and will probably fall short, since it has for the previous six seasons, and there’s nothing to suggest that it’s doing anything new to prevent it this year.

The money guys will come in on a certain Monday morning, and call the people who are providing the line of credit that the company has been relying on, and ask for a short term loan to make payroll for the coming Friday. And, they’ll be told, no, we’re not going to continue servicing this loan. And, not only that, but we’re calling in all your paper.

Then, the money guys will sit there in shock for a few minutes, drink some coffee, maybe head out to the street to smoke a c-gare–e, which they had quit some years ago but which seems like a good idea today. Then, they’ll start calling everybody they know and their uncle, whomever has some cash laying around. Maybe they’ll find some shylock who will front the money, or maybe they won’t. Word will get out on the street that B&N isn’t solvent, and can’t make their payroll for the week. And fewer and fewer calls will be answered, and if they can find somebody who will front the money, the interest will be usurious.

Worst case scenario: booksellers show up to work, and the stores are padlocked.

Best case scenario: stores stay open, but the company goes to the receiver and Chapter Eleven.

If you’re a bookseller at B&N, start looking for a new job now. Forget about severance and all the rest of that b—s—, because you won’t get it at this point.

This is how it will go.

Link to the rest at The Layoff and thanks to Felix for the tip.

You can see more anonymous comments at the Barnes & Noble section of The Layoff.

Why Amazon Should Buy Barnes & Noble

29 November 2018

From MediaPlay News:

When Amazon launched in 1994, founder Jeff Bezos envisioned his online bookseller competing against local stores and national chains such as Barnes Noble.

And for four years Amazon did just that: Sell books over the Internet more cheaply than anyone else – including Barnes & Noble, which remains one of the last-standing brick-and-mortar book (and packaged media) retailers.

Now Barnes & Noble is in financial trouble. It generated an operating loss of $26.7 million in the most-recent fiscal period. Revenue dipped 2% to $753.2 million.

The Nook segment – B&N’s attempt to compete with Amazon through a branded tablet device and digital (movies, TV shows, music) content – posted a $1.5 million operating loss. Revenue dropped nearly 17% to $21.7 million from $25.9 million last year.

. . . .

Earlier this year [Amazon] became Mercedes-Benz’ largest single customer for the Sprinter van – a fleet order many speculate the company will use for local deliveries.

Acquiring Barnes & Noble would give Amazon 633 retail/distribution locations – many in prime mall locations.

Link to the rest at MediaPlay News

Or Amazon could purchase the assets of Barnes & Noble that were of potential value to Amazon for even less money in a bankruptcy sale.

Barnes & Noble Needs A Turnaround Expert

25 November 2018

From Seeking Alpha:

Barnes & Noble rode strong growth in non-books to its best comp decline in several quarters.

The book business continues to erode.

Management’s failure to properly manage capital will leave this company in a vulnerable state if the broader economy turns negative.

I am staying far away from this company in spite of its cheap valuation. Shares of Barnes & Noble continue to languish below $7 and well below the $9 per share takeout price that was offered by Sandell Asset Management in 2017.

. . . .

Books remain weak, falling 3% during the quarter, but non-book sales actually grew 1.9% y/y, driven largely by a double-digit comp growth in toys.

. . . .

Inventory was down just 2.7% y/y, roughly in line with the company’s sales decline of 2.5%. In reality, management should be driving to bring inventory down faster than sales declines. This is not revolutionary advice or even a unique take, but the difference between companies like Foot Locker and Barnes & Noble is a key focus on improving capital efficiency when sales slide to ensure a strong balance sheet. Barnes & Noble is nowhere near aggressive enough here.

Likewise, the company has actually seen its Q2 days payable outstanding come down over the past three years. Stretching payables outstanding is a low effort way to increase cash flow, and given Barnes & Noble’s importance in the book industry, I doubt the company would face much pushback. This could free up as much as $20-30 million, allowing the company some additional capital flexibility.

In addition, Barnes & Noble continues to show a disgusting neglect for the long-term by paying out a quarterly dividend. This amounts to $44 million over the last 12 months – far more than the company’s free cash flow, which has caused it to continually increase its debt. The only way for Barnes & Noble to weather an economic downturn at this point would be to be debt free; yet, the company instead chooses to borrow from its future. In fact, were the company to simply cut the dividend to zero, it could easily be debt free in the next three years. Instead, management will put the survival of the business at risk.

. . . .

I doubt the company, as it remains today controlled by Len Riggio, will be able to attract a capable turnaround specialist. Barnes & Noble like RadioShack before it continues to ignore capital management, which puts its core business at risk of becoming worthless.

Link to the rest at Seeking Alpha

Small bookstores are booming after nearly being wiped out

25 November 2018

From CBS News:

A growing number of shoppers will be supporting their independent neighborhood bookstores on Small Business Saturday. After nearly being wiped out a decade ago, small bookstores are booming.

Dane Neller, the owner of Shakespeare & Co. in New York City, just opened his third indie bookstore, and he’s proving the naysayers wrong.

“Bookstores are back and they’re back in a big way,” he said. “I’m not giving to to hyperbole — it was record-breaking for us.”

The Manhattan sanctuary is part of a resurgence of independent bookstores nationwide. Customers who visit the story can stumble upon a new author or linger over a latte while a special machine can print a book in three minutes if it’s not in stock.

The rebound comes after years of competition from deep discount superstores and online behemoth Amazon, which together turned small shops into an endangered species.

According to the American Booksellers Association, the number of independent bookstores fell by approximately 40 percent between the mid-90s and 2009. They have recovered some of those closures, and this year, sales are up more than five percent over a year ago.

. . . .

“I’m not trying to compete with online retailers. I’m trying to compete on what I do best,” said Oren Teicher, the CEO of the American Booksellers Association. “When you come into a store like this and you don’t know what you want and you browse these shelves, you’re gonna find books that you didn’t know existed. If you are … engaged in your community, curating your content, having people work the store that are knowledgeable and passionate about books, there absolutely is a formula for success,” Teicher said.

Link to the rest at CBS News

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

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