Publishers Are Tiring of Revolving Door in Barnes & Noble’s C-Suite

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From The Wall Street Journal:

Book-publishing executives expressed concerns to Barnes & Noble Inc. BKS 0.83% about continuing management instability at the retail giant and the direction of the business, in the wake of the sudden firing last month of Demos Parneros as chief executive.

Mr. Parneros was terminated without severance in July for violating company policies. The company said at the time that his dismissal was unrelated to issues of financial reporting or fraud, but offered no further guidance.

The next CEO will be Barnes & Noble’s sixth since 2013. During that stretch, the company’s sales have eroded significantly despite various turnaround strategies under multiple management teams, from store closures to stepped-up marketing of toys and gifts, to opening stores with restaurants.

Publishers relayed their concerns in meetings with Barnes & Noble in the weeks following Mr. Parneros’s exit, people familiar with the matter said. They indicated that they have a strong interest in Barnes & Noble running a healthy and stable business, to counteract the clout of Amazon.com Inc. in book retailing.

The invitations to the private meetings were extended by Leonard Riggio, the bookseller’s 77-year-old executive chairman and largest shareholder. He was joined by Timothy Mantel, the chief merchandising officer who is on the rise at the company, the people said. He is one of three executives who report directly to Mr. Riggio and are running the company until a new CEO is hired.

. . . .

According to one publishing executive who met with Barnes & Noble, Mr. Riggio said he was fully committed to the business and that there was a plan to turn things around. “I expressed frustration that if they had a plan, we didn’t know it,” the executive said. “We all want them to survive.”

Another publishing executive indicated frustration with the direction of the business. “You’re trying to focus their attention on what they can do to effect change,” the executive said. “They’re defensive about the CEOs.”

A third publishing executive, who voiced concern about the physical state of the stores, said Mr. Riggio promised new stores with a smaller footprint but didn’t indicate any plans to update existing stores. “I get the logic of that if they can move forward at an aggressive pace,” the executive said.

Mr. Riggio said in an interview that he wanted the publishers to know that he was “up to the job” and that he still “loves the business and its mission.” He disputed the suggestion that publishers had expressed unhappiness with the most recent management change or the direction of the business.

. . . .

“My top priority is building sales,” said Mr. Riggio, adding that the continuing declines in store traffic affecting many retailers can be reversed through better promotions and advertising. Mr. Riggio said, “What brought us here is books. We have to stay book-centered and we have to have a super large title selection.”

. . . .

One industry expert said turnover in the C-suite made it more difficult for Barnes & Noble to maintain a consistent strategy. “Anybody who comes in at the top thinks they are being asked to solve a problem that needs solving,” said Amy Rhodes, a principal at publishing-industry consulting firm Market Partners International. “Presumably if they make a quick exit, the next person comes in with a new idea.”

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

PG says the US economy is growing at a rapid pace, the best in years. Many companies are working hard to meet increasing customer demand, expand their businesses and overcome the many other challenges of handling explosive growth. They’re having problems finding quality executives because everybody is looking for quality managers.

In a market for top executives that looks like this, what competent executive would even consider interviewing with Barnes & Noble?

The smell of death is strong in the largest shrinking bookseller in the US. The guy who really runs the business, Riggio, is more and more out of touch with current market realities. Barnes & Noble was in an excellent position to gain a large share of the ebook market several years ago, but completely blew the technical and design side of online sales and marketing. Incompetent executives managing incompetent tech people couldn’t do anything right.

Back then, the question was the same as it is today – what talented executive or technologist would go to work for Barnes & Noble when there are so many really good companies with bright futures who are hiring?

BN is going to be choosing its next CEO from among those people who can’t get another job during the best job market in decades.

PG says you should expect another Joe-Bag-O-Donuts manager to come stumbling into BN in a few months and go stumbling out a few months later. The march of the stumblebums will continue until BN finally stumbles into bankruptcy, paying out dividends to Riggio until the last possible moment.

And Barnes & Noble’s competition is Amazon.

5 thoughts on “Publishers Are Tiring of Revolving Door in Barnes & Noble’s C-Suite”

  1. I’m retired now, but I’d take on the B&N challenge as CEO if I thought it had any power under the umbrella of Riggio.

    There’s a good business to be had as a serious #2 competitor in a large market, and the relationships with the trad. publishers and the ability to showcase books is not to be sneezed at.

    They’ve no doubt run out of time, and you’re right they’d be shopping for a CEO from the bottom of the barrel who can expect to operate in handcuffs, but it’s a shame — it’s still possible to make this a solid #2 player.

  2. It really is a shame how B&N chooses time and again to fail instead of being the decent business it could be. There’s no harm in not making quite as much money as the industry leader but still making decent money.

    • A well run number two can make good money just by cherry picking the price insensitive. (And that’s just one strategy. Plenty others exist. Oftentimes there’s more money in niches than in the mainstream.)

      The trick is to pick a customer base and woo them.
      The wooing is essential.
      “Stock it and they will come” is just a passive way of going under.

  3. Publishers are frightened by B&N’s slow circling of the drain.

    Though they actually care not a wit about B&N itself. What they fear is losing still more control over what might be read. Instead of one big B&M store they will have to deal with lots of littler ones.

    And then there’s Amazon. The big kid on the block whose ebook sales they crippled by forcing that agency thingy on. The qig5 won’t have B&N to use as a bargaining chip the next time contracts come up, and I see Amazon not playing quite as ‘nice’ with them the next time around.

    I have no idea what Riggio thinks he’s playing at, maybe hoping for a big buyout or there’s some reason he wants to go down in flames …

  4. If Riggio offers me the job, I’ll take it . . . provided I get a $13 million signing bonus up front and a $13 million cash severance. $1 a year plus end-of-year performance bonus.

    I might even do B&N some good. Certainly couldn’t hurt it. Fire everybody connected with their online store and bring in a wizard to set it up anew. Tell the Manhattan Mafia that we run strictly on consignment from now on, and if they are not willing to play, they are free to take their business elsewhere. Cut the headquarters staff with a vengeance. Push ordering authority and responsibility down to store managers. Go ahead and file Chapter 11 now so that I can restructure all B&N’s contracts. I like playing in bankruptcy. Do the boys in the Manhattan Mafia like it too? They won’t when I get done with ’em.

    Wouldn’t be any worse than it is now.

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