Barnes & Noble in Trouble

Townhall.com ^ | January 7, 2012 | Mike Shedlock

[Kaslin]

Retail sales are up but profits are down as noted in Profit Warnings at Target, Kohl’s, J. C. Penney, American Eagle

However, shrinking profits are one thing, huge losses another.

On Thursday, Barnes & Noble increased its projected loss per share for the current fiscal year to between $1.10 and $1.40, from the 30 cents to 70 cents it reaffirmed one month ago.

I have commented before that brick-and-mortar book stores are in serious trouble. It's time to move Barnes & Noble to the top of the list.

The Wall Street Journal reports Barnes & Noble Seeks Next Chapter

The nation's largest bookstore chain warned Thursday it would lose twice as much money this fiscal year as it previously expected, and said it is weighing splitting off its growing Nook digital-book business from its aging bookstores.

Ironically, Barnes & Noble had been one of the first to recognize the potential of digital books. In 1998, it invested in NuvoMedia Inc., maker of the Rocket eBook reader, and the bookseller actively supported digital-book sales. But in 2003, it exited the still-nascent business, saying there wasn't any profit in it.

It wasn't until 2009 that Barnes & Noble re-entered the business, introducing its Nook e-reader. By then, Amazon had been selling its Kindle device for about two years, and was offering best sellers for $9.99, a fraction of what hardcover best sellers are priced at.

Apple introduced its iPad tablet in January 2010. Amazon responded with its competing Kindle Fire tablet this past September, and in November, Barnes & Noble introduced its Nook Tablet.

To promote the Nook, the retailer returned to national TV advertising in 2010, after a 14-year hiatus, buying spots on popular programs such as "American Idol."

The heavy Nook investment has squeezed Barnes & Noble's bottom line.
Barnes & Noble said in a statement on Thursday it was "in discussions with strategic partners including publishers, retailers and technology companies in international markets." It said that could lead to expanding the Nook business overseas.

What's the "Next Chapter"?

The Journal reports Barnes & Noble is also considering a plan to spin off its Nook business. If it does, can it make a profit selling books the old-fashioned way? If it doesn't, does if have the resources to compete against Amazon and Apple?

Either way, the "Next Chapter" for Barnes & Noble just might be bankruptcy court. It took me a second to catch the play on words in the WSJ article because the first thought I had was "Chapter 7" and a word was missing.

Bear in mind, even if that happens, it can take years to play out. GM was terminally ill for a decade before it succumbed to the inevitable.

[surrey]

I thought I read that Wendy’s had moved in 2nd place behind Mickey D’s replacing Burger King?

I’m also surprised by Kohl’s. The stores near us seem to do a bang up business.

[mewzilla]

Also, Borders burned a lot of companies on their way out. B&N’s probably paying for that, too.

[I cannot think of a name]

“My husband will be very sad if actual books go away. He was given a Kindle and he re gifted it to someone else. He likes a book in his hand, to turn pages and dog ear the page when he puts it down.”

I had to go to the other room real quick to make sure my wife wasn't posting under a new name.

My feelings are EXACTLY the same. I have to stare at a computer screen a large portion of the day. I'll be dammed if I'll stare at the blasted thing to engage in one of my favorite pleasures - reading. The sooner these stupid electronic books 15 minutes of fame is up and they are all in the landfill, the better!

[Moonmad27]

I agree with you. I have a 2nd generation 3g kindle, plus the Kindle iphone and ipad apps — but the Kindle itself makes it easier to read a book straight through. It’s just too tempting on the iphone to stop reading and check FR!

Now that I’m also getting magazines on the iphone, it sure declutters the house and it’s great to have a library always with me.

I buy only “keeper” books and antique cookbooks on paper.

[Perdogg]

I like Abebooks as well. Also, Alibris.

[DJ MacWoW]

Did You Know?

The Current FReepathon Pays For The Current Quarters Expenses?

Now That You Do, Donate And Keep FR Running

[tioga]

A combo of Panera Bread & Barnes and Noble would work for me. I had a kindle, now I have a nook tablet. Very happy with both. I believe we still need real books for children. I cannot see buying them a kindle or nook.

[crosshairs]

My best reading occurs every morning when I’m dropping the kids off at the pool. If you know what I mean.

[Yorlik803]

Went to one of the Barnes and Nobles stores. The selection sucked. Had a 50 dollar gift card and could find anything worth even taking for free.
I got a Kindle Fire for Christmas and it is great. One of the best Christmas gifts I have got in a long time.Good quality videos and cheap books. Cant beat it.

[Ghost of Philip Marlowe]

I used to use alibris all the time, but I found abebooks to have a better selection with (usually) some lower prices available. But the two are very similar. I mainly just got in the habit of going to abebooks.

[sayuncledave]

I sit astride the lines in this battle. I wish success to Barnes and Noble for two reasons: one is that I own a nook color. The other is that I think more competition means less likelihood of higher prices. But I also buy most of my books from abebooks. The prices are outstanding, the service good, and most of the books I buy are older, sometimes out of print.

I like the nook color because it’s a decent quasi-tablet, and I have many public domain books on it. And it doesn’t hurt that I can use it in similar fashion to my ipad-slinging brethren at work, in meetings.

I still prefer having a genuine book in my hands. For me that still has magic. But I understand and share, to some degree, the attraction to e-readers, whether nook or kindle or sony.

[xzins]

I like real books better.

[prisoner6]

Do girls have this sitting and reading thing ?

I don't think they do. At my home it was always Popular Mechanics, Mechanics Illustrated, Popular Science et al. Or outdoors magazines in "the reading rood." At my wife's family's farm it was always gear head magazines. Nary a Home and Garden in sight. The closest might have been a build your own home or log cabin living magazine.

The old standbys were Farmers Almanacs and of course Sears, JC Penny and Monkey Wards.

I miss those days...sigh.

[Perdogg]

abe is great for used books. I bought most of my James Bond Jonathan Cape collection from Abe.

[Peter W. Kessler]

Call me old fashioned, but I still enjoy turning paper pages.

Amazon.com is a treasure trove of used books. My library is full of $2.00 - $5.00 “must read” old volumes.

I have purchased from Abe Books, as well.

[Little Ray]

I’d miss B&N.

When I went on my first “official” date with my wife, we were early for the movie - and she wanted to stop at the Barnes & Noble to look at books.

Right then I KNEW I was going to marry her.

One thing I’d miss more than B&N though is the mom & pop new and used book stores.
Sometimes they’re empty, but sometimes they are like treasure troves.
My favorite bookstore, the Science Fiction Mystery Bookstore is long gone, but I still miss it.
There is one used book store in Micanopy, FL, that I could spend days in, and hundreds, if not thousands, of dollars. It has the best history/military section of any book store I have ever been in!

[warsaw44]

same here. I love to read and before my business went down in flames I’d buy three or four books at a time in Barnes and Noble.

I stare at a laptop screen all day and certainly have no interest in doing that while I read.

A place like Barnes and Noble allows me to see what has been recently released. What new history books are available and so on. But these days I use my phone to snap a photo of a books cover, load the info into Amazons custom wish list and thats about it. Just can’t afford to buy books any more.

[bcsco]

I started out with a Sony eReader. That displays pages but can also be read on a PC. The page numbers were different on the laptop than on the reader but page # was displayed on both. The Nook also displayed page numbers on both, even though the amount of information displayed on the PC was greater than on the Nook. So, that’s not the explanation...

[Drew68]

I can think of at least one reason for a physical bookstore to exist—it’s a place to go, wander around, sample books, maybe have coffee and a snack, talk with your friends, take a date, etc. I hope the day doesn’t come when we lose all our interesting physical social gathering places.

That's the problem. Many people "sample" books at the bookstore, see something they like, pull out their smartphone and order it from Amazon right then and there. Not a good business model. And not just for bookstores either. For pretty much every store. Stores have become the places where we look at, handle and try out the items we eventually buy online. It'll be sad when they go but we consumers brought it on ourselves.

[dawn53]

That’s a great idea.

I don’t think the e-books are what’s putting them out of business. We have a Kindle Fire and an iPad (w/iBooks) and we only buy “real” books, not e-books. We like the fact that we can read a book and then pass it on to someone else. Plus a large part of the population doesn’t even have access to an e-book device so I can’t see where that’s destroying their business.

So then where is the problem. IMO, Amazon is the problem.
I order all our books from Amazon (and with Amazon Prime...I now order almost all my “everything” off the site.) The prices are cheaper than in the store, w/Prime the shipping is free for 2 day delivery, and 3.99 if you need it next day.

I think Amazon is what’s gotten the chain bookstores in trouble.