When B&N cut a deal with Samsung in 2014 to sell rebranded Samsung Galaxy Tabs, it committed to selling a million tablets in the first 12 months (plus an optional three-month extension). B&N never met that goal; instead their digital revenues dropped quarter after quarter, but that hasn’t caused them to abandon the rebranded Samsung hardware.
According to an SEC filing, Barnes & Noble and Samsung have inked a new deal to continue their existing partnership. B&N has committed to selling $10 million worth of each rebranded tablet each year, and if it falls short it will have to make up the difference.
In other words, since B&N carries three rebranded Samsung tablets, it has committed to selling $30 million in Samsung hardware over the next year. They’re also going to have to sell $10 million worth of the rebranded Samsung Galaxy Tab A 7.0, which the filing says will be launched by the end of the year.
That’s a huge step back from B&N’s previous commitment, and it’s also a far smaller number of tablets than Amazon sells. If we divide the retail price of the rebranded Samsung hardware into the $10 million, we see that B&N has committed to selling tens of thousands of tablets each year.
In comparison, Amazon sells millions of Fire tablets in a single holiday quarter.
And to make matters look even worse for B&N, the retailer’s original commitment was worth more than $150 million. It covered a tablet that retailed for $179, and even if a lot of the units were sold at a discount that is still well over $150 million in sales.
That is a measure of just how far B&N has fallen in the past couple years.
And given that the B&N website is still broken today, making it almost impossible to buy a tablet, they’re bound to slip even further.
B&N’s Nook revenues for last quarter totaled $51.7 million, down 33% from the year before. Would anyone care to wager when that will slip below $10 million a quarter?
images by harrisonrweber