Standing around with a few random indie bookseller types at MoCCA recently, one of them stated “Barnes & Noble will be gone in a year!” It’s a popular opinion but not a popular result – B&N may be the last of the big box bookchains, but when Borders went under it traumatized comics, manga and everyone else who relies on print.
I hear an opposite reaction from many in the traditional publishing world – B&N is literally too important to fail, and the entire industry wants it to stay around. And the company keeps tightening its belt to stay around. Jim Milliot covers the B&N beat at Publishers Weekly, and recently reported on a huge round of layoffs that would save $40 million. that resulted from a lackluster holiday season. An executive from Target/GNC has also been brought in to manage the store’s merchandise areas. In an earlier report, Milliot laid out a $10 million loss in fiscal 2018.
Total sales at Barnes & Noble dropped 6.6% in the quarter ended July 29, compared to the same period a year ago. Sales in the quarter, the first of fiscal 2018, were $853.3 million, down from $913.9 million in the quarter ended July 30, 2016.
Despite the decline, B&N cut its net loss to $10.8 million, down from $14.4 million a year ago. B&N CEO Demos Parneros attributed the lower loss to continued reductions in expenses. The biggest improvement on the bottom line came in B&N’s Nook division, where the operating loss was cut to $2.7 million from $14.0 million in last year’s first quarter. Sales in the Nook unit, however, fell to $29.5 million, from $41.0 million a year ago.
Sales in B&N’s core retail stores declined 5.9% in the quarter, to $830 million. Comparable store sales decreased 4.9% as, B&N said, “declines in non-book categories outpaced improved book trends during the quarter.” Specifically, B&N said book sales fell 2.8% in the quarter, while non-book categories–which had been a good performer–fell by about 8%. Sales through BN.com also fell in the quarter. The division’s operating loss increased to $12.5 million from $7.4 million in last year’s first quarter.
B&N still makes a lot of money. It just needs to find a way to balance its budgets.
Today’s New York Times includes an editorial called Save Barnes & Noble! by David Leonhardt, whose credentials on twitter are that he is a NYT op-ed writer. Leonhardt blames Amazon and lax regulation for B&N’s woes:
The book business is looking like a case study. Amazon is taking over, yet has never run into antitrust scrutiny. It has reduced prices, after all. It sells many e-books for $9.99 and hardcover best sellers at a big discount. So what’s the problem?
Plenty. Amazon has been happy to lose money on books to build a loyal customer base, to which it can then sell everything else. “Amazon isn’t primarily concerned about books these days,” Oren Teicher, who runs an association of independent bookstores, told me. “They are far more focused on getting consumers into their ecosystem so they can sell them every other product under the sun.”
It’s nice that Leonhardt is picking on predatory big business, but he glosses over B&N’s own internal struggles and failure to adapt. But to be honest, B&N is the LAST thing you should use as an example of disruption.
Bookstores have survived disruption longer than anything – despite Amazon’s original, core business being books. Think about that. Amazon has been selling books at discounts longer than anything and yet bookstores are still here and growing. The growth comes from indie stores clawing away at rock surfaces as freeezing gales buffet them, but they are still here while record stores, video stores, toy stores and newsstands were blown away in the storm.
Indeed, Amazon is opening its own brick and mortar stores, (for nefarious, data gathering purposes it’s suspected) and they’re like mini B&Ns with books and coffee in a placid environment. Out of all the products they carry, why did Amazon pick BOOKS to showcase? They could have showcased anything.
Bookstores may still go down, but they lasted longer than anything. I’ll leave the whys to other pundits to discuss.
So to answer the question posed at the top of this article, is B&N going to fold Answer: I don’t know! I sure hope not because it would be a disaster for a lot of people. But its demise is not a foregone conclusion either.
Heidi MacDonald is the founder and editor in chief of The Beat. In the past, she worked for Disney, DC Comics, Fox and Publishers Weekly. She can be heard regularly on the More To Come Podcast. She likes coffee, cats and noble struggle.