B&N is Considering Smaller Stores

Followingbarnes noble logo a bad holiday season and poor fiscal year, Barnes & Noble Chair Len Riggio gave an interview to the WSJ earlier this month concerning B&N's future plans.

The company is still casting about for a solution to their predicament. In January of last year they announced plans to shrink for the next decade by closing 20 stores a year, but now that Riggio has replaced Lynch as head of Barnes & Noble it would seem that they are going to try for stores with smaller footprints.

WSJ: Will we see a smaller, 15,000-square foot Barnes & Noble bookstore one day?

Mr. Riggio: Yes, it’s possible. You can’t tell yet. Remember we had a really good holiday season. One of the things that you’ve observed is that it seems like the level of digital convergence from books to digital has decelerated. Having said that, a fairly substantial number of the big readers have digital reading devices.

The average B&N retail store is anywhere from 25,000 to 40,000 square feet (B&N College bookstores are a different case, rarely reaching 3,000 sq. ft) so this would be a step down for the stores.

This might be a sign that B&N has found a new way forward, but I wouldn't get your hopes up. They still have not figured out how to price match their own website:

WSJ: Can Barnes & Noble sell all its books, online and in the bookstores, for one price?

Mr. Riggio: I wish we could. It’s kind of tough.…If you look at the retailers that are somewhat troubled, those retailers are the ones that are selling name brand products. There are a certain number of customers who say who has the best price? They’ll come into the retail store itself with their phones and hit the button…. The more you sell products that are branded outside of the store, that aren’t exclusive to the store, the harder it is. We don’t have a solution at hand. We haven’t come up with one yet.

Funny, Walmart figured this out a while ago, and so have most other retailers, and yet Barnes & Noble has been frustrating customers for over 5 years now.

I wonder if this is a symptom of B&N not being able to adapt to current retail market?

WSJ

 

About Nate Hoffelder (11578 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

7 Comments on B&N is Considering Smaller Stores

  1. This would be a little ironic, considering that they and Borders ran all of the smaller chain stores out of business years ago.

  2. I thought Walmart’s solution was not to show the price? And also to squeeze the suppliers so hard that the damage (or lack of profitability) becomes someone else’s problem?

    • Walmart’s solution is logistics.
      Move product to the store as cheaply as possible, keep it in the store as little as possible, move it out as quickly as possible.
      Everything else flows from there.

      • And don’t forget to keep most of your staff on food stamps at that too (and $19 billion of Walmart’s income is also from food stamps)

      • No, Wal Mart’s solution is volume.

        Wal Mart has annual revenues of more than $450 billion a year. They’re selling incredibly large quantities of their items, so they can afford to sell them at lower margins and still turn an overall profit. They also have a number of high margin business (read: groceries) that can subsidize other departments in the store that aren’t entirely profitable.

        BN has annual revenues of just over $7 billion. Naturally, because they’re selling fewer of each item they need to have a higher margin of profit on each item to remain in the black.

  3. Surely comparing B&N to Walmart isn’t particularly useful? My understanding is that Walmart sells a lot of high ticket items that can subsidize discounts elsewhere. Even if we’re talking about the books they sell, they can give large discounts to their customers because they buy only a few titles at enormous discount.

  4. Kate is right. Comparing B&N to Walmart is silly. Not all retailers can deploy the same strategy and make their claim to fame. Selling good for dirty cheap and fast moving inventory is not for everyone if you dont have the structure to handle it. Also selling books is not the same as consumable goods.

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