Barnes & Noble (likely) to close stores in 2010

[davron]

In AOL news today the following;

Retailers Likely to Close Stores in 2010

Barnes & Noble (BKS), the largest book store company in the U.S., recently disclosed that sales from Nov. 1, 2009 to Jan. 2, 2010 were down 5% to $1.1 billion. Same-store sales were off 5.1%. BKS is up against a rapid increase in book sales over the internet which is dominated by Amazon and includes large retailers such as Wal-Mart. The rise of the e-reader and e-books is also in the process of undermining “bricks-and- mortar” book buying traffic. BKS peer Borders recently closed 200 of its Waldenbooks outlets and fired 1,500 people. Barnes & Noble has 775 outlets and 636 college bookstore. BKS will have to push online sales, marketing of it Nook e-reader, and close at least 100 stores.

[Maxflier]

Originally Posted by Lemmy

Anyone who charges the prices that B & N does (and that means u, Borders) deserves to go under completely, especially if those prices don't flex dring hard economic times. People often speak more with their wallets than their mouths, and shame on the retailer that can't, won't, or doesn't see it!

I don't understand the problem people have with their prices. Books are always cheaper there than at Amazon when I look for something. For instance there is a book I need to buy right now and Amazon has it for the cover price ($7.99) and Barnes and Noble/Borders both have it for the EXACT SAME price, yet I can use coupons at both of those stores to get it much cheaper.

[leitmotif]

I really don't have a problem with their book prices either. Sure most of the time I can get the book for a little cheaper through Amazon, but it can be wroth it sometimes for the ability to physically browse for my books and walk out of the store with them instead of waiting for them to be shipped.

Sure, their DVD prices suck, but they're primarily a book store (my local BN doesn't even sell DVDs) and can't compete with stores like Best Buy when it comes to prices.

Also, no matter how much you dislike a store because of their prices you shouldn't be happy about hundreds (possibly 1000+) people with no say in those prices losing their jobs.

[Edison]

This was actually taken from the 24/7 Wall Street site that posted their analysts views and speculation which included "The list below includes the eight store chains most likely to close a significant number of locations this year and an estimate of the number of outlets they will have to shutter."

[MinLShaw]

Originally Posted by Lemmy

Anyone who charges the prices that B & N does (and that means u, Borders) deserves to go under completely, especially if those prices don't flex dring hard economic times. People often speak more with their wallets than their mouths, and shame on the retailer that can't, won't, or doesn't see it!

It's really not fair to blame these places for not being able to offer the kind of below-list prices that their competitors are able to offer. They're just trying to maximize profit, the same as everyone else. It's just that some of their competitors can buy in larger bulk and offset lowering prices on some merchandise and make up for it on the profit from other merchandise.

[dx23]

Originally Posted by Maxflier

I don't understand the problem people have with their prices. Books are always cheaper there than at Amazon when I look for something. For instance there is a book I need to buy right now and Amazon has it for the cover price ($7.99) and Barnes and Noble/Borders both have it for the EXACT SAME price, yet I can use coupons at both of those stores to get it much cheaper.

That may be your case, but almost all their inventory is retail price while Amazon.com usually has at least a 10% off in their pricing plus free shipping and no tax (except NY). B&N and Borders are stores that have not adjusted to the changing time of online retailing and global marketplace. Borders is worse, since they sell their stuff $5 over MSRP in their site, but B&N is not that far removed from bad business practices. All these stores have had the ability and opportunity to lower their prices and compete with e-tailers like Amazon but they don't do it because it affects the bonus check for the top executives at the end of the year.

[dx23]

Originally Posted by MinLShaw

It's really not fair to blame these places for not being able to offer the kind of below-list prices that their competitors are able to offer. They're just trying to maximize profit, the same as everyone else. It's just that some of their competitors can buy in larger bulk and offset lowering prices on some merchandise and make up for it on the profit from other merchandise.

Yes, is their fault. B&N, Borders, FYE, Blockbuster have the same ability to buy in bulk as Amazon and Best Buy does, but they don't do it because they have not adjusted their business practice to the changing times. Borders even used to sell stuff at $5 under retail price until they were bought by an imbecile, who decided to re-price stuff to MSRP (and $5 over online).

[Giles]

^ it helps if you have a member card

the Criterion sale though is da bomb.

[BKenn01]

Originally Posted by Lemmy

^ Thanks, dx23, for explaining it with perhaps a bit more patience than I would/could have.

As a former Musicland manager (in NYC in the 80s), I can add, without hesitation or pity, that any company that buys as much stock for their shelves as any of those mentioned above can most certainly offer a lower price to match nearly any competitior. Those who simply price things at or above MSRP do deserve to be shunned by paying customers.

It's a shame about their employees, it really is....but that's just another group of people, aside from their own damned customers, that these big businesses absolutely do not give a shit about. And the reason is...because no one has ever forced them to care. And the only way to do that is financially. It's the only thing they understand!

Did you ever see a P&L statment? Apparantley you never saw what these type places pay in rent. That is the reason they struggle with discounting in B&M. Barnes and Noble does discount heavily online which is more than Borders does.

Just because they are closing stores does not mean they are in danger. It may mean that these B&M locations just are not worth the effort any more. I would be their online sales are way up. Maybe they have decided that their future is online.

Originally Posted by Giles

^ it helps if you have a member card

the Criterion sale though is da bomb.

Exactly, they have really good online sales. I clean up on Barnes and Noble online. I rarely buy in the store.

[JohnnyDaBull]

The one close to my house closed recently. Btw Im in memphis

[dx23]

Originally Posted by BKenn01

Did you ever see a P&L statment? Apparantley you never saw what these type places pay in rent. That is the reason they struggle with discounting in B&M. Barnes and Noble does discount heavily online which is more than Borders does.

A lot of the retailers I mentioned have their stand alone place and many times, they own the building, so not all of them rent. With the amount of bulk they buy, they can certainly reduce the prices. Look at Blockbuster. Why in the hell do they sell used Blu-rays taken out from their original cases for $16? I can find the same BD new at nearby stores for much less. It is simply antiquated, stupid business practices.

[Elpresidentepez]

This news bums me out on a personal level. I worked at a BN for nearly 4 years and it was mostly a great experience. I have several friends who work still there. As a consumer is saddens me because, while generally Amazon.com has lower prices, I've gotten some amazing deals with coupons and the membership card. Plus, I still like the experience of shopping at a book store; browsing the aisles and actually looking at the book I'm about to buy. It's an experience that some might not understand, but those who do will miss. In the long run it doesn't help anyone, as it means less competition, so we wont see as many of those 10 new book sales. It's certainly not deserved, and hopefully they can turn this around. I won't buy my books at a Wal-Mart.

[Josh-da-man]

Yeah, rent can be a killer in retail. Most B&N stores are huge, and I'm sure that rent and utilities eat up a lot of cash.

Bookstores are also tricky in that they use up a lot of floor space for items that turn slowly. It's my understanding that the bulk of a bookstore's sales are a small number of bestsellers, but the bulk of their shelf space goes to hosting a variety of product that is often slow-moving. The tables up front with Stephen King and Dan Brown books are subsidizing all of the stuff in the rest of the store.

[BKenn01]

Originally Posted by dx23

A lot of the retailers I mentioned have their stand alone place and many times, they own the building, so not all of them rent. With the amount of bulk they buy, they can certainly reduce the prices. Look at Blockbuster. Why in the hell do they sell used Blu-rays taken out from their original cases for $16? I can find the same BD new at nearby stores for much less. It is simply antiquated, stupid business practices.

They still have to pay for the real estate and building costs.

http://online.wsj.com/article/SB125077360125346161.html

Barnes & Noble Sales, Profit Fall
E-Books Bolster Online Business, but Lack of a Hot Seller Hurts Chain's RevenueArticle Comments (4) more in Earnings »Email Print Save This ↓ More

By JEFFREY A. TRACHTENBERG
Barnes & Noble Inc. reported declines in sales and earnings for the second quarter ended Aug. 1 as shopper traffic at the giant U.S. bookstore chain has slipped.

Sales at Barnes & Noble have now fallen for five consecutive quarters; earnings have declined for seven consecutive quarters.

The bookseller's results reflect a broader struggle among retailers trying to find growth as consumers cut discretionary spending. Bookstores have been grappling not only with the falloff in consumer spending but heavy competition from online booksellers and discount chains.

Revenue declined 5.3% to $1.16 billion. Sales at stores open for at least a year, a key indicator, declined 6.9%. Barnes & Noble earlier forecast a same-store sales decline for the quarter of 5% to 7%. Revenue at the retailer's online arm grew 2% to $102 million, due in part to attention garnered by the opening of Barnes & Noble's e-bookstore on July 20.

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Bloomberg News

A shopper looks through books at a Barnes & Noble in Washington, D.C., Thursday. The company's profit has declined for seven straight quarters
This summer has also lacked a hit book, which typically lifts retailers' sales during the beach season. Last summer's key titles included "The Host," Stephenie Meyer's blockbuster science-fiction tale.

That is expected to change in the current quarter, as retailers, including Barnes & Noble, expect a boost from Dan Brown's long-awaited novel, "The Lost Symbol," which goes on sale Sept. 15.

For the second quarter, Barnes & Noble earnings fell 20% to $12.3 million, or 21 cents a share, from $15.4 million, or 27 cents a share, a year earlier.

Excluding a seven-cent insurance-related gain, the company had earnings of 14 cents a share. Analysts polled by Thomson Reuters expected earnings of 10 cents a share. Gross margins improved to 30.8% from 30.7%, due primarily to lower distribution costs, lower returns, lower theft rate, and fewer markdowns.
The retailer expects to offer more than one million digital titles through its Internet store by the end of the year, said Steve Riggio, the company's chief executive, during a conference call with analysts. The electronic books will be accessible via devices including PCs, BlackBerrys and iPhones, he said.

Earlier this month, Barnes & Noble agreed to purchase Barnes & Noble College Booksellers Inc. from Leonard Riggio, chairman of Barnes & Noble and its largest shareholder. The $596 million acquisition, to close Oct. 1, is expected to stabilize sales and earnings, although some critics contend that digital textbooks will draw away sales from college bookstores in general.

On the conference call, Joseph Lombardi, Barnes & Noble's finance chief, estimated that 2,000 colleges and universities still manage their own bookstores, and that Barnes & Noble expects to be able to add some to the 624 stores currently under management. He didn't give a time frame for the additions.

The printed college textbook market this year will generate $5.02 billion in sales, according to Albert N. Greco, a professor at the Fordham Graduate School of Business Administration. By comparison, digital textbooks will produce only $117.5 million in revenue, he estimated.

Here is an article about their profits from the WSJ in August. Their gross margins are 30.8%. That seems pretty low to pay all the expenses they have. And the are most certainly not gouging anyone with that kind of margin.

[mw390]

I dont know how ANY of these bookstores make money. Every time I go into one there are people all over the place sitting on their asses reading books. It doesnt help that they sell Starbucks and have nice comfy couches also. It's like all the candy stores in NYC. They have signs at the magazine racks. "This is not a library"

[dx23]

Originally Posted by BKenn01

They still have to pay for the real estate and building costs.

Like almost every other brick and mortar store. That is part of operational cost and Best Buy, Wal-Mart, Costco, Target, etc, have to pay too.

[BKenn01]

Originally Posted by dx23

Like almost every other brick and mortar store. That is part of operational cost and Best Buy, Wal-Mart, Costco, Target, etc, have to pay too.

Wal-Mart and Target sell items that can subsidize their DVD category. I am not convinced that we will not see Best Buy with the same problems. It is tough for the B& M stores to compete with online operations. And online, BN is very competive in my opinion. I get great deals there all the time.

[Dean Kousoulas]

I love B&N. Nothing like browsing the aisles looking for something new and different, and picking out a copy that hasn't been damaged by the coffee drinkers in the cafe.

I'd rather pay a few more dollars and get it now then wait a few days for Amazon to ship.

[ctyankee]

Originally Posted by Dean Kousoulas

I love B&N. Nothing like browsing the aisles looking for something new and different, and picking out a copy that hasn't been damaged by the coffee drinkers in the cafe.

I'd rather pay a few more dollars and get it now then wait a few days for Amazon to ship.

Not me. I have too much stuff I haven't even read, so what's a few more days to get the stuff to save some money. That said, I do think it is quite helpful do be able to browse books rather than just rely on word-of-mouth from friends.

B&N and Borders need to crack down on the dudes that set up shop in the coffee area and use it as their office. You know the ones I mean. The guy on his laptop and talking loudly on his headset while he's using their outlet to recharge his computer - the guy with the Dunkin' Doughnuts coffee and bagel. They are a blight and should be told to piss off.

[Rainet]

I'm sort of torn about the whole book shopping experience these days at barnes & noble. I remember back in the 80's. There was no couches or starbucks. They didn't even like it if you stayed too long at the magazine rack. However at least you knew that just about any book you buy is brand new.
While now if you buy a book, you have to check it throughly to make sure there isn't any coffee stains or dirt from people reading the book for hours. However obviously it's nice to be able to browse everything at your own pace. So it's a catch-22 in my book. (no pun intended)

[K&AJones]

Well I don't get it....with the so-called Stimulus PackageI thought thousands of jobs were being saved or created or at least that is what The Wizards of Smart are saying out of Washington. How can both B&N and Sams be closing stores all over.

[ben12]

Originally Posted by K&AJones

Well I don't get it....with the so-called Stimulus PackageI thought thousands of jobs were being saved or created or at least that is what The Wizards of Smart are saying out of Washington. How can both B&N and Sams be closing stores all over.

You're kidding with this, right?

[davidh777]

I have a longstanding emotional relationship with physical bookstores. My family used to go out for dinner then stop at Crown Books (discount store) afterward, plus I had a number of independent faves. I still shop at those kinds of places when I can, but it's pretty rare. Online is easier for my time and money, so I guess I'm part of the problem.

[ctyankee]

Originally Posted by davidh777

I have a longstanding emotional relationship with physical bookstores. My family used to go out for dinner then stop at Crown Books (discount store) afterward, plus I had a number of independent faves. I still shop at those kinds of places when I can, but it's pretty rare. Online is easier for my time and money, so I guess I'm part of the problem.

If things are an improvement, it's not a problem, it's progress. I imagine that most of us have very fond memories of books - the touch and even the smell of a book. For me the memories are not of a bookstore (there were none in my town) but of the library. I also have fond memories of just reading a book in my room growing up or reading a book to my children.

Books will always exist but are likely (in my view) to become a bit like the LP record. Available but limited to certain categories such as the coffee table book. Have you seen the new iPad from Apple? Here is a device where turning the pages is like turning the page on a real book - no button to push. It may be another few generations of these iPads before it becomes truly wonderful but the future is knocking at the bookstore's door and it is saying to hell with inventory of books and books gathering dust. I just don't see the large bookstore footprints of a B&N with much of a future. My kid's generation with their school knapsacks full of heavy books will be the last generation to do so.

[Josh-da-man]

Originally Posted by Rainet

While now if you buy a book, you have to check it throughly to make sure there isn't any coffee stains or dirt from people reading the book for hours. However obviously it's nice to be able to browse everything at your own pace. So it's a catch-22 in my book. (no pun intended)

That pisses me off to no end, too. I've seen people sitting in the coffee shop area of bookstores spilling coffee on books, dropping muffin crumbs between the pages... it's fucking gross.

And I want to bitch slap people I see sitting in the big lounge chairs reading books, and breaking the spines and creasing up the dust jackets in the process.

Of course, Amazon isn't much better. I'll receive books that are carelessly tossed into a box and arrive at my house with the shit beat out of them.