Yesterday Barnes & Noble announced the umpteenth bad quarterly report, with revenues declining 6.6% overall and digital revenues falling 28%.
But don’t worry, because B&N has a plan to turn around the company, one that is bound to earn them a trip to Stockholm to collect a Nobel prize.
Barnes & Noble CEO Demos Parneros announced on the investor call yesterday afternoon that B&N is going to open more stores and sell more stuff.
As we look to reinvent our customer value proposition and growth sales, we’re focused on a number of initiatives to increase the value customers derive from shopping at Barnes & Noble. Our value proposition is comprised of membership, convenience, digital offerings and most importantly our stores where customers come to browse, discover, and interact with 26,000 knowledgeable booksellers.
Pricing is a key consideration and over the past few months, we’ve launched a number of price tests tied to our membership program to see which authors resonate best with customers and increase the overall value of the program. Our goals are to increase enrollment, conversion and visit frequency.
Beyond pricing, we’re also focused on growing sales by improving the overall shopping, browsing and discovery experience for better visual merchandizing and signage as well as personalized recommendations. This includes testing changes to existing store layouts and remerchandising certain businesses. We believe there are significant opportunities to manage our inventory better, increasing trends and reduce unproductive merchandize.
As part of our efforts to better understand customers and develop a robust data analytics program, we’ve recently installed customer counters in all our stores and reintroduced mystery shops. We plan to enhance customer engagement and personalization through improved customer insights. And recently we’ve established an analytics team building the foundation for better analytic rigor.
Stores are an integral component of our value proposition and recently we made a few critical hires to oversee our store growth initiatives. Carl Hauch has joined as Vice President of Stores and will oversee the entire retail store organization and profitable growth of the business. Jim Lampassi has also joined the leadership team as Vice President of Real Estate Development and is responsible for developing and executing our real estate strategy. I’m excited to have Carl and Jim join our team.
In addition to the two new test stores we have in the pipeline, we are reviewing our entire portfolio in identifying opportunities to open new stores in new markets as well as opportunities to relocate stores as their leases expire instead of simply vacating markets. Our goal is to position the company for net store expansion.
Barnes & Noble has hit upon the previously undiscovered secret to turning a retail business around. They’re going to sell more stuff.
… [clipped] 500 words of mocking B&N …
Folks, I may sneer at B&N but the simple fact is if they actually knew how to increase sales then their revenues last quarter would have held steady (at least).
If B&N actually knew how to do better then they would not have consistently reported declining sales over the past several years. So when they say that they will increase sales, they are less stating a goal than confirming that they are the underpants gnomes of retail.
Like the underpants gnomes of South Park, Barnes & Noble knows what they want to accomplish but they have absolutely no clue on how to achieve that goal.
It doesn’t matter how many CEOs they hire and fire, nor how many new VPs play the game of musical chairs. As an institution, B&N is incapable of solving the most basic of problems: how not to go out of business.