January 28, 2013

Barnes & Noble Downsizes, but Not Down and Out


Two years ago, Barnes & Noble bought the controlling stake of Borders, and most of the industry surely assumed it was just a win by one firm over another. But more recent movements in this retail market suggest it was rather more decisive evidence that the hardcopy book business at large is struggling to withstand the currents of a digital age that’s only getting stronger – a win by one industry over another.

The last nail in the coffin may have come this week, as Barnes & Noble announced its plans to close up to a third of its chain over the next decade, or up to 20 stores a year, according to CEO Mitchell Klipper.

It’s no surprise that the smartphone arms race has made room for a breadth of opportunity in mobile programming, let alone the reality that book stores of late couldn’t be fewer and farther between. With Barnes & Noble shrinking, one must wonder where the company’s adaptations faltered, and where it sees itself in the foreseeable future.

Said Klipper to the Wall Street Journal, "In 10 years we'll have 450 to 500 stores” – a number he said is still “a good business model.”


Image via Shutterstock

“Is it what it used to be when you were opening 80 stores a year and dropping stores everywhere? Probably not. It's different. But every business evolves," he said.

Though obviously partial to maintaining relevance in the company, Klipper’s vision isn’t without support. “More and more [bookstores] are turning over,” echoed David Johnson, CEO at Strategic Vision, LLC. Barnes & Noble sees that not as a death warrant, but simply a new climate in the industry.

Though the retailer didn’t enjoy as big a profit from its Nook tablet against pieces like Amazon’s Kindle, it maintains that its continued success hinges on an e-marketplace, barnesandnoble.com, which counterbalances an always necessary physical presence in the community.

 “There’s still a demand for hard books,” said Johnson, clarifying that authors and publishing houses see an anchor for branding their work in physical facilities, through book signings and similar events not available digitally.

“The right fiscal move is to have a bigger presence online,” he said, “but you still need both.”

Barnes & Noble saw a small boost upon Borders’ liquidation in 2011, but incurred a 10.9-percent decrease in sales over the following holiday season. Its projected reductions reflect a need to be smarter with its assets, but it is nonetheless a precedent for how a business can manage on a playing field that caters to an edgier campaign.




Edited by Brooke Neuman



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