I am surrounded by books. I’ve always kept my books, carting them from place to place, but things began to get out of control when I bought my first house in Virginia and I had the room to have bookshelves. Then 19 years ago I married another collector. Luckily we live in a large space because we not only combined libraries, but we continue to acquire books at an alarming rate. We started cataloging our books on LibraryThing.com a year ago and are still less than half way done at 2,100 books. We get our books from many sources: online used book dealers, yard and library sales, used book stores, independent stores wherever we vacation, Barnes and Noble and our local independent for new books. So I was happy to see this story in the Washington Post this morning.
On Monday, Barnes and Noble announced that the chain’s CEO, William Lynch, was stepping down.
It’s never a good sign for a company when its CEO resigns, leaving it provisionally leaderless. In the case of a struggling chain like Barnes & Noble, it’s enough to make people wonder how long it’ll be until it declares bankruptcy. But headlines, in this case, are deceptive. Lynch’s resignation doesn’t show Barnes and Noble is doomed in the age of Amazon. It shows how Barnes and Noble can survive — as long as it doesn’t try to compete with Amazon.
Ah, the Nook. I had a coworker with two teenagers that read a lot. She got them Nooks for Christmas one year. One of them loved it, the other wanted real books. I understand there might be times when reading a book electronically might be convenient, but for me that convenience is outweighed by a physical, print book.
If you’ve got a teleological conception of new technology as something that eventually drives the old into oblivion, Barnes & Noble is doomed. It sells physical things in a digital world, and other companies are better at selling digital things than it will ever be. Blockbuster and Tower Records essentially disappeared from the face of the earth, after all, and we should have no illusions that Barnes & Noble won’t go the same way.
Here’s the thing: Bookstores, more so than movie rental and record stores, are oases in the middle of cities (and even in suburban malls). We go there to kill time, expose ourselves to new stuff, look for a gift without something specific in mind, and maybe pick up something on impulse while we’re there. Even Borders’ disorganized warehouses left holes in the urban fabric when they disappeared, and Barnes and Nobles would do the same–they’re a kind of public good, at a time when the public is getting less good at supporting libraries.
So, is there a way for Barnes & Noble to survive? The answer is yes–in a vastly different form.
There’s a happy storyline buried in Barnes and Noble’s overall revenue picture. The Nook disaster clouds the fact that the physical stores actually aren’t doing that badly, generating a comfortable $374 million profit last quarter. The chain got a significant bump when Borders closed 399 stores, and it’s now the only national bookstore chain in the country. It’s been shedding unprofitable real estate, letting expensive leases expire, and consolidating into the spaces that actually generate revenue.
“When you look at the financials on the retail stores, it’s basically a pretty good business,” says Al Greco, a professor of marketing at Fordham University School of Business.
It’s also got a hidden weapon: The academic market. Barnes and Noble now manages some 700 university bookstores, which are essentially monopolies over high-priced textbooks as well as collegiate merchandise. They’ve been moving into textbook rental and e-books there as well, and the millions of students on financial aid that includes textbooks are more willing to shop local rather than scour the internet for deals.
Finally, they’ve got an important friend: The publishers, who hate the idea of an all-Amazon world. To help keep the only large physical retailer alive, they might be willing to do things like offer some inventory on consignment, so that the bookstore doesn’t have to eat the cost of unsold books. They could even help offer e-books with the paper version at cut-rate prices on the Nook, whoever ends up owning it, or open-platform tablets like the Nexus.
The company’s management has noticed. Len Riggio, who started the chain and is now back running it, is interested in splitting off the retail stores and taking them private. Without the Nook, the business would get hammered by the markets anyway, so it’s best to avoid them. Absent the pressure of quarterly earnings statements, he might be able to try some radical new ideas, like drastically shrinking their square footage and offering a smaller selection of books curated by a knowledgeable and passionate staff.
The Brookline Booksmith which is the other store where I buy books has a wonderful staff – and they send out a great weekly email newsletter. Not that the BN folks where I go aren’t helpful, just that it can be more difficult to find one of them. I have to admit that I use BN online a lot especially when I know what I want. But there is nothing like roaming around a bookstore: one never knows what treasure one will find.
And besides, print may be one of those things that never vaporizes entirely, just as newspapers still put out daily editions because they pay the bills. People like giving books as objects, having shelves full of them as decoration, traveling with them and not worrying about them getting stolen. Even in a smaller form, Barnes & Noble could be there to serve them.
“Will it survive? Yes it will,” says Greco. “We will still be buying and selling printed books in the U.S. in the year 2020. There will be a decline, but print is not going to disappear.”
Is 2020 supposed to be comforting? That’s not very far away. I’m hoping for way longer than that. And will continue to do my part by buying books.
Photograph: Brookline Booksmith
- Barnes & Noble’s troubles don’t show why bookstores are doomed. They show how they’ll survive. (washingtonpost.com)
- Bookstores Not Dead Yet as Riggio Bets on Barnes & Noble – Bloomberg (bloomberg.com)
- Barnes & Noble chief executive quits (bbc.co.uk)
- Barnes & Noble Drops E-Commerce CEO for Eye-Shade Guy (businessweek.com)
- Why Did Merged Channel Fail Barnes & Noble? (storefrontbacktalk.com)
- Barnes & Noble’s Catch-22 (acrossallsports.com)
- Should We Care About Barnes & Noble’s Survival? (fool.com)