(I’m going to steer clear of the Brexit vote today. Not because I don’t have things to say but because there is so much hand wringing and head shaking and doom-saying that I have already had enough of it this morning. I’ll have something to say, probably next week. Besides, BN has made a couple of announcements that have me shaking my head and wondering what the heck is going on.)
I don’t think it is any surprise that BN announced yet another sales drop earlier this week. This time, it announced a 3.1% drop for fiscal 2016. From Publishers Weekly:
Revenue in fiscal 2016 was $4.16 billion, 27.from $4.30 billion a year ago. The retailer also reported a net loss of $24.4 million in the most recent year, compared to net income of $36.6 million in fiscal 2015. Excluding the $39.1 million loss from discontinued operations, B&N posted earnings of $14.7 million, down from $32.9 million in income from continuing operations in fiscal 2015.
The article goes on to note that BN’s Nook division once again took major hits. Total revenue for that division fell 27.4%. Part of this was attributed to costs incurred in the restructuring of the division. However, that was only $4 million. The Nook division has so many holes in it and BN has yet to figure out how to deal with it.
Where I had to laugh about the PW article was when it said this, “Comparable store sales were flat in the year, while comp sales excluding the sale of Nook products rose 0.4%, slightly behind the 1% increase that B&N had expected.” When all you expect is a 1% increase, a 0.4% increase is not “slightly” behind. That is a kick in the teeth. The fact that PW bought into the misconception shows that it continues to embrace the same misunderstanding of the market that BN and the Big 5 do. They want the industry to go back to how it was several decades ago instead of moving forward.
Am I wishing BN ill? No. I want bookstores to succeed. However, I don’t believe they will as big box stores. That day is gone. Boutique stores and stores that have minimal stock but POD on-site capabilities very well may be the way to go. The fact that BN is continuing to try to maintain their large footprint storefronts in the face of economic realities is mindblowing.
Of course, so is the news I saw this morning about their plans for some new “flagship” stores next year. These stores aren’t increasing their stock of books. No, they are going to try to increase traffic by — wait for it — selling beer and wine and having full breakfast, lunch and dinner menus. In order to handle the increased traffic they are sure this change will bring into the store they are — drum roll — doubling the size of the cafes.
Hmm, a bookstore that is taking away even more floorspace from what they say is their core business. How many customers are they truly going to bring in as opposed to those they may lose because of less space for books, less space to sit and read comfortably without being interrupted by someone who might have had too much to drink?
Hell, how many folks are going to say, “Hey, hon, let’s go to BN for dinner tonight!”
It may work but, at the moment, it looks like a desperate grab for a straw that is getting shorter and shorter.