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Publishers Puzzled, Frustrated by Parneros Lawsuit

2 September 2018

From Publishers Weekly:

The revelations disclosed in former Barnes & Noble CEO Demos Parneros’s lawsuit, filed Tuesdayand charging the company with defamation and breach of contract, left publishers mystified at how the nation’s largest bookstore chain will turn around its financial fortunes.

“Indecipherable” was the one-word email response from the president of an independent publisher when asked about the recent events at B&N. “I don’t know what to make of the news,” another executive at a publisher said. “It’s still unsettled over there.”

. . . .

Whatever the merits of the case, publishers said it is clear that the time has come for B&N to find new leadership, either by a sale of the company or finding a CEO with a new vision for the company. Since Parneros’s dismissal, the company has been run by the trio of Allen Lindstrom, chief financial officer; Tim Mantel, chief merchandising officer; and Carl Hauch, v-p, stores. Riggio remains executive chairman and will be involved in its management until a new CEO is found.

“B&N needs to take action and needs capital to do it,” one publishing executive told PW. “Clearly being acquired is one way to get that done. There are other ways, but something needs to happen.”

An independent publisher who viewed some of the charges in the lawsuit being made “by a guy who is really pissed off and wants his severance,” nonetheless agreed that B&N “needs to create a smooth transition for Len.”

. . . .

“I think it’s time {B&N} gets a new owner,” the head of an independent publisher said. “One that’s interested in being in the book business and has a proper management team. Someone like Indigo would be great.”

. . . .

Several publishers said the frustrating part of Parneros’s departure is that it finally looked like B&N had a plan in place to move forward. Parneros was “candid about the issues B&N faces,” one executive said, adding that the plan he laid out seemed workable if given some time. All publishers would like to see the next B&N CEO have book experience. And there is one other characteristic they would like to see—a CEO who is actually running the company.

Link to the rest at Publishers Weekly

Big Publishing, Bookstores

18 Comments to “Publishers Puzzled, Frustrated by Parneros Lawsuit”

  1. Well, they said it all.
    And if the official mouthpiece of the Manhattan Mafia is pushing for Riggio to leave, can the unofficial one (NYT) be far behind?

    The clocks are ticking…

    • Maybe they’ll take out a full page ad like they did before – not that I recall it doing them any good … 😉

  2. “… left publishers mystified at how the nation’s largest bookstore chain will turn around its financial fortunes.”

    LMTBO! (Laughing my tailless butt off!) They think there was ever a way to stop that slow motion train wreck?

    ““I think it’s time {B&N} gets a new owner,” the head of an independent publisher said. “One that’s interested in being in the book business and has a proper management team. Someone like Indigo would be great.””

    All they have to do is buy Riggio out. Go ahead boys, make him an offer he can’t refuse.

    Me still laughing as I pop more corn …

    • They keep carrying on about Indigo, even while B&N critics complain about how the stores are filled with non-book merchandise. I’m under the impression that Indigo doubled-down on that strategy. Can any Canadians fill us in on what their stores are like?

      This report from May says that books aren’t really their thing anymore

      https://www.theglobeandmail.com/report-on-business/indigo-profit-soars-60-per-cent-as-general-merchandise-shift-pays-off/article28516198/

      • Way back in 2011 Eoin Purcel did an insightful piece on bookstores in the age of digital:

        http://teleread.com/bookshops-you-have-three-choices/index.html

        1- Bet on digital: build a digital platform they could transition to. As of 2011 Nook was on its way to do that but…well, 2012 happened and they royally screwed up inventory management. Plus, they never fully committed to digital, even before 2012. Half measures lead to full failures. Tolino seems to be doing okay in Germany though they seem to have toned down their brags(?). Don’t hear as much from them these days.

        2- Bet on retail. Anathema to the literati, this path accepts books as just another kind of widget and leverage floorspace, customer base, and management skill to transition to a different marketplace. Indigo did that once they pawned off Kobo to Rakuten’s boss. B&N tried this, halfheartedly and inefectively.

        3- Bet on Print: basically, become the best bookstore you can be, hunker down, focus on your customers, and live within your means. Waterstones did this, eventually. Powells and the various specialty and destination bookstores did this. So did many of the surviving non-chain stores. Specialization is a good survival strategy in stressful environments and so far more effective that trying to be all things to all people. Hudson news has survived peddling “everywhere books” in a very opportunistic setting, other have gone genre specific, used book arbitrage (especially the penny book and remainder peddlers), and even AmazonBooks have found a place for their brand, selling curated pbooks selected for local tastes.

        As I said; Insightful.

        • A bookstore which is not Powells…

          Their cafe and other sales make the profits and the books only break even.

          However, unlike B&N they realize the books are what gets their customers in the door so they didn’t reduce them.

          • Note taken.
            But they’re still afloat and “living within their means” *because* of the books, right?

            So that puts them in the “marginal-but-would-benefit-if-B&N-folds” category, like many smaller non-chain stores.

            Also, they stock used books, which B&N doesn’t. And back in the day I bought a few ebooks from Powell’s so if MSREADER or interoperable epub were relevant they would still be selling those, too. No luddites, they.

      • The non-book stuff is in the stores because there is too much floor space for just books. Sales don’t support it. That’s why they put the non-book stuff there.

        Replace the non-book stuff with books, and total sales will fall even further.

        There is no solution. The external environment has changed too much.

        • You just fingered the solution: cut the floorspace.

          There’s plenty of bookstores that are surviving in the new environment and look to continue indefinitely. Not all stores but if B&N goes down with Riggio more than would survive if they ditch him.in time. What they all have in common is good management and an understanding of how much floorspace they can profitably monetize. There actually is room for a dozen or two big box format stores. Just not 600.

          • I agree. However, floor space was B&N’s competitive advantage. The larger selection is what drove consumers to their stores rather than to the smaller stores.

            Drop the big stores, and a barrier to entry to smaller operators opens up. If B&N ran a bunch of small stores (Amazon sized?), what’s their competitive advantage in a market where B&M retail market share is shrinking?

            • Even right floor spacing won’t save them.

              Amazon’s little stores are showcases and have what Amazon research has told Amazon the customers will want to look at/buy.

              On the other hand B&N will continue to offer only what trad-pub guesses might sell …

              • Hey, payola might just be what’s keeping them afloat! 😉
                If I remember correctly, Waterstones was getting some $50M pounds. B&N might be raking in more in payola than ebooks and hardware combined.

            • The staff.
              But they fired those, didn’t they?

              Waterstones, on the other hand, set theirs loose to run their stores according to local interests and got rid of payola. Turned out to be a net gain.

      • They’re all talk and no walk (nothing new with that crew.) They want (demand) somebody else fix things before they have to hand even more control of their distribution to Amazon.

        The one good thing I see coming from all of this is the qig5 won’t have the ‘power’ to force Amazon to settle for agency next contract. No, I don’t see Amazon doing anything illegal if the qig5 try to play games – they’ll have more than enough legal options like using the publishers’ printed price as the price to sell their pbooks at (or not selling any of their books at all if the contract lapses this time … 😉 )

        • Allen (I know it’s you),

          The one good thing I see coming from all of this is the qig5 won’t have the ‘power’ to force Amazon to settle for agency next contract.

          Maybe you called it, but I think Amazon will step aside and let them cut their own throats with agency. When B&N goes the way of the dinosaur, hardbacks will become a bad bet. Only those who serve niche markets will do okay; for example, Osprey. Some publishers will die, and there will be a mad scramble for the lifeboats. Maybe some publisher will get the idea to go hat in hand to Amazon for salvation and will have his feet set on the path of righteous pricing. Maybe not.

          All this can be avoided by any publisher willing to move headquarters from Manhattan to Madison. But they seem to prefer death in New York to life in Wisconsin.

  3. Smart Debut Author

    Bet on digital books.
    Nope. Sabotage own digital sales, focus only on print.
    Bigger bookstores.
    No, smaller bookstores.
    More games, puzzles, and tchotchkes, but fewer books.
    No, focus on books.
    Promote better curation and customer experience via book-savvy staff.
    Nope, fire expensive book-savvy staff, replace ’em with min-wage grunts.
    Open cafes inside the store…
    …and then turn off cafe wi-fi and cover electric outlets, so no one lingers there.
    In-bookstore restaurants.
    Nope. That didn’t work.
    Serve alcohol.
    Nope. That didn’t work.
    Hire new CEO, then fire ’em a few months later and pay millions in severance.
    Hire another CEO, then fire ’em a few months later & don’t pay severance.

    It’s pretty clear B&N management has no clue what they are doing, and worse, no clue that they have no clue.

    Game over.

    Soon.

  4. What is so simple at ground level is almost impossible for these guys to see in the gold-leafed altars of avarice that they live on. And the solutions at ground level vary by location and that particular audience, yet they continously seek a one-size fits all solution that winds up working for none of the stores.

    The truth is, a bunch of us here on comments could probably design a better system than all of them. And I, for one, am only delaying doing the dishes and not being paid a few million bucks.

    I’m still sad that B&N didn’t make it. They were our best shot at forming a real, book-based competition for Amazon. They were in a prime position and they just sat there sawing away at their own throats with dull knives for years instead of taking it.

    • Well, there is no shortage of alternatives to Amazon and collectively they might serve as a check against (theoretical) Amazon hubris. Individually, though, nobody has shown a willingness to even look for the chink in Amazon’s armor. (It’s there, too. Just not easy to see and there’s no magic bullet to get to it.)

      It takes two to tango and if all the challengers are content to do a digital version of “stock it and they will come” then Amazon’s run at the top will last a while.

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