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B&N Investor Sandell Wants the Bookseller to Go Private – Would Bezos Buy?

The latest word on Barnes & Noble is that one of it corporate investors wants the company to be sold off to a private investor.

From Fox Business:

An activist investor wants Barnes & Noble Inc. to try again to sell itself, arguing the bookseller needs an owner who can invest in its beleaguered operations.

Sandell Asset Management  has recently started buying a stake in the New York bookstore chain and is already among its 10 biggest investors, according to people familiar with the matter.

Sandell believes the company could attract a bid of more than $12 a share, compared with a closing price Monday of $7.10, according to a letter reviewed by The Wall Street Journal that is to be released Tuesday.

Even though physical bookstores have declined in popularity in the U.S. in the internet age, Sandell reckons they aren’t going away and that Barnes & Noble’s status as the only national chain could attract a well-heeled private-equity firm or another retailer.

Sandell isn’t proposing to buy the retailer, so it’s not clear whether this proposal is serious or just a scheme to boost B&N’s stock price and make money.

That said, it’s not a bad idea.

Len Riggio has demonstrated over the past five years that he has no clue how to revive/rescue Barnes & Noble. He has continued to run the company as a retailer during a period when it is abundantly clear that the old retailer model no longer works.

Maybe it is time to find another owner, one that could revive the company by finding a new path.

B&N’s current dabbling in opening restaurants is a step in the right direction – it follows a trend in indie bookstores of wrapping bookstores around other spaces: bars, coffee shops, or restaurants (like Kramer Books in DC).

And so is B&N’s events offering announced last year – or it would be if it weren’t so obviously aimed at propping up the existing retail.

Perhaps this is B&N’s future:

Really, though, what B&N needs is a fresh perspective that amounts more than just playing musical chairs with management. The company needs someone who will note that both malls and indie bookstores have adapted to the times by turning themselves into event spaces rather than retail spaces – they’re now destinations.

Do you suppose Jeff Bezos would be interested?

He can afford it, he loves books, and his leadership has done wonders for the Washington Post.

What do you think he would do with Barnes & Noble?

images by uff-da,  evblogger

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Barry Marks July 25, 2017 um 10:52 am

My guess is that Jeff Bezoz wouldn’t be the least bit interested in buying B&N. I think they’re just too unimportant to him as competition.

It’s probably more likely that he’d encourage someone else to buy them.

Maria (BearMountainBooks) July 25, 2017 um 11:36 am

Why would he bother? They tried selling off Nook and couldn’t even manage that. Bezos doesn’t need anything they have. The problem is that no one does–not even their customers need them very badly.

At best, Amazon might want a few of their real estate properties, but there are other ops for that out there too.

The time to sell it was a long, long time ago.

Rebecca Allen July 25, 2017 um 11:49 am

I was a little surprised to realize Bezos-buying-B&N has been proposed by other people before — I thought it was novel here. It is difficult to imagine that purchase passing any kind of sniff test from an anti-trust perspective, given that the attempt to spinoff the Nook business failed. (If it had succeeded, and the market being assessed for dominance was purely p-books, things might be different. Altho I’m unconvinced.) I suppose you might have meant Bezos as an individual investor vs. AMZN buying B&N. It’s hard to see that getting past the regulator, either.

I heard a couple of private equity managers discussing how they assess retail businesses which would like to go private. They said their first screen was, how resistant is this business model to Amazon? There were a variety of people in the audience who seemed to think this was a pretty normal first screen (I’m a bit of a newbie at this kind of conference / panel discussion, so honestly I was a little startled). I think it might be extremely difficult to sell B&N to any kind of private equity fund. Given that many of the defenders of p-books invoke cultural values vs. market values, I wonder if perhaps B&N could maybe move in the direction of becoming a non-profit. (<– Only slightly kidding here.)

Allen F July 25, 2017 um 12:14 pm

"Do you suppose Jeff Bezos would be interested?" Nope, too much crap/overhead for what they’d be getting. (Marry the girl and all of her relatives will be living with you too – and this gal is neither rich or good looking and her attitude is one to make you think you rather be in hell than with her.)

While Jeff may like a few of the storefront locations, it would be easier/cheaper to get just the ones he wants and not be stuck with all the others.

I haven’t bothered to research 'Sandell Asset Management', but it sounds a bit like some of those pump-n-dump types you read about. Buy low, talk the stock up as high as it will go, and then sell so you can walk away from the swan dive the company will be doing next.

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Paul July 25, 2017 um 1:46 pm

This article is a pretty good explanation of why B&N are in trouble.

"Will the death of US retail be the next big short?"

BDR July 25, 2017 um 2:37 pm

Why in hell would Bezos want this floating turd in the bowl? Antitrust considerations aside, this is testament to how desperate things have gotten at B&N. They’re going down and there’s nothing to stop it.

You take a company private when the company is undervalued. That’s not B&N.

jseger9000 July 25, 2017 um 2:38 pm

"…both malls and indie bookstores have adapted to the times by turning themselves into event spaces rather than retail spaces – they’re now destinations."

I get mixing a book store and a restaurant.

But can anyone point to a mall where this strategy was successful in more than just the short term?

Nate Hoffelder July 25, 2017 um 2:54 pm

The older, less attractive mall in my area has replaced a lot of its retail stores with restaurants, an indoor go kart track, and a bowling alley, etc.

As for a long term solution, this trend (death of retail) is less than ten years old. So there’s no way to tell if this is a long term solution.

jseger9000 July 25, 2017 um 4:22 pm

Right. I understand that is happening. But how long ago did they make the switch? Was it long enough to see if it lasted past the initial curiosity stage and brought in dependable, steady business?

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