With the recent decline in the Nook industry (ammounting to a fiscal loss of $475.4 million dollars)and the seemingly fatal economic status of bookstore chains everywhere, the resignation of
Barnes & Noble's CEO William Lynch on July 8 seemed to be the kill-stroke for the last national bookstore chain in the US.
However,
Bloomberg News and reporter Matt Townsend seem to think otherwise. Apparently there has been a quick reorganization in the management works, resulting in the rise of Leonard Riggio, the company's founder, as executive chairman. Townsend reports in his article
"Bookstores Not Dead Yet as Riggio Bets on Barnes & Noble" that the chain may be showing signs of wear and tear due to the recent publishing hurdles and economic strains but is in reality far from throwing in the towel.
In fact, Townsend reports that
"analysts including David Strasser of Janney Montgomery Scott LLC say predictions of the bookstore’s demise are greatly overstated. The retail division’s profits are actually growing."
Not in the Nook section, apparently...but how is that surprising? With competition from Amazon.com and the iPad and Kindle, far more successful eReading platforms by far, the Nook doesn't really stand a chance. And when eBooks are falling off the sales as well, there's little that can be said for Barnes & Noble's electronic platform. Analyst Michael Norris of Simba Information Inc. makes the important point that just because eReaders are selling and popular does not necesarilly mean the same for eBooks. About
"half of iPad owners and 25 percent of Kindle Fire users didn’t read an e-book last year."
Only so many people are going to buy eBooks, and they are going to do it with the more successful eReader. Either because the fad is dying or because people just love the more traditional means of reading (both have been seriously contemplated and even admitted to be factors in the market), eBooks are definitely plateauing. However, eReaders are still being given as gifts, especially considering they can be used for so many different purposes. And once an eBook had been acquired, many readers will not go farther than that, and simply be content to carry around their personal library without every expanding the electronic selection. This speaks volumes of papery goodness for physical books and bookstores. EBooks only make up 20% of the total book market, and the rise is slowing down. According to the Association of American Publishers,
"e-book sales rose 44 percent to $3.04 billion after more than doubling the previous year, according to the Association of American Publishers."
Going from a 200% rise to a 44% rise? I'd say that's cutting back.
Despite all of this, David Strasser claims that
“It’s not anywhere near the end of Barnes & Noble the bookstore.”
Whether you're interested in buying a book or just visiting, bookstores are a great hangout and meet-up place for people who want a quiet, literary atmosphere to get away, read a book from the shelf, and smell the coffee and glue from the thousands of pages of collective hard- and paper-backs on wooden and plastic shelves. And Barnes & Noble is a nationally recognized chill-spot. And whether they went to the bookstore just to relax or not,
"many people who frequent Barnes & Noble leave with a book, especially cook books and ones for children."
It's just good marketing. Get someone to come in, and more often than not they'll leave with something. It's what free samples and trial periods and guest memberships are all about. Get someone in the door and you can hook them. Norris again quotes,
“Print books still have value...People still buy millions of them to give as gifts. That tells me print isn’t as unhealthy as people think.”
95% of Barnes & Noble's locations are profitable, and only 2% of its stores closed in the last year. The chain has customizable stores for each locale and settles into the community, holding popular book-release midnight parties, author signings, sales, and more. Even more locations help schools raise money and host storytellings and poetry readings. And their coffee shops are to die for. Hooray Starbucks.
All this to say that Barnes & Noble would have to really take a downturn further than people think it has in order to tank entirely. Changes will need to be made, updates and evolutions to be taken, but the last American bookstore chain is safe for now.
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Original article at:
To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net
To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net
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