Don’t Count Out Barnes & Noble

Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.

B&N card - 38ensoB&N released their 2012 results and it was worse than expected. B&N’s stock was hammered and fell 17% immediately.

Their store sales are down; they are hemorrhaging money; they are losing market share in the explosive growth eBook arena and management announced another shift in strategy by ending the Nook tablets. The company is going in the wrong direction on most every avenue.

Reporters, bloggers, pundits, readers and investors are all ganging up on them. Much of it is deserved. There is a lot of excellent coverage on the management and situation of B&N at Forbes, PublishersLunch, paidContent and DBW.

While there is a lot more pain to come for B&N, there is still value here.The following three are key assets and each of these areas separately is a viable business:

1)   The Nook is the #2 eBook retailer with 20% of the market:  Barnes and Noble did build a credible eBook business. They entered a highly competitive market with some of the strongest and richest competitors in the world. They were able to carve out at least 20% in a market that has Amazon and Apple. Plus giants like Google and Sony tried to compete, and each of them has less than 1%.

The trends are going down and they are losing share. If Microsoft is serious about competing with Apple, Amazon and potentially Samsung, then they need to complete the purchase of Nook Media and get on with it. They have a lot of fans for now, but how much longer will they stay around with the bad news?

2)   B&N is the only national book chain in the USA: They operate over 700 superstores and have more display space for physical books than any other book retailer. It is still important to get front-of-store placement at B&N. No doubt what was once a major asset (the biggest bookstore footprint) can be a liability today. The chain will need to get smaller. But even if they were ½ the size, they would still be the biggest. The B&N physical stores still have a lot of reason to exist.

Plus, B&N still has some of the most talented book buyers and store managers in the industry. There are a lot of smart people working there and keeping things going in these tough times.

3)   B&N College operates over 600 stores: B&N College division is adding locations. As with all forms of physical bookstores, there is a definite transition in how the stores will look and what value they provide for the community. B&N college stores are an integral part of many campuses. The college bookstores can also easily diversify into non-book (and higher margin) items like t-shirts, mugs etc.

It is easy to trash B&N after the past year results. But there are still some positives to consider.

But do they have the right leadership and do they have enough time?

2 thoughts on “Don’t Count Out Barnes & Noble

  1. Theresa M. Moore

    Most of the B&N denigrators are sock puppets from Amazon, or naïve and brainwashed consumers who think Amazon is God. I hold faith with B&N because I have to, and anyone who has had the same experience with Amazon agrees with me. Without competition from a major chain and most of the indies, Apple, Kobo, et al, Amazon would become a monopoly for selling ebooks and we would all suffer. One of Amazon’s new stunts is to reject nonfiction books because they contain expository information “freely available on the internet”. Since when does any book exist outside that criterion? At least B&N does not engage in such editorial stupidity. It has been around longer than Amazon, too, so it sill survive long after Amazon has been taken apart.



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