The endangered fate of Barnes & Noble, America’s last major book store chain
It is hard to imagine a destination like Union Station without a fully stocked bookstore, even if it is also the case that an increasing percentage of the consumer traffic is carrying a mobile reading device that is loaded with books purchased elsewhere, mainly from Amazon. The sprawling Barnes & Noble on Georgetown’s Wisconsin Avenue is gone, and the company has closed superstores in New York, Dallas, Chicago, and Seattle (among other places) in similarly well-situated locales as part of a broader brick and mortar contraction that suggests–disturbingly–its long-term decline. Barnes & Noble’s post-holiday report for 2012 reflected a drop in same-store sales of 3.1 percent, and despite a substantial push to expand its Nook line of e-readers, product sales for the devices were down 12.6 percent from a year ago. …
While holding on to ownership of nearly 80 percent of its Nook division, a $300 million investment in Nook from Microsoft last fall, followed by an $89.5 million commitment from Pearson, which sees value in the growing electronic textbook market, are signs that Barnes & Noble can forge a way to secure enough of the digital business to offset the problems it faces in traditional bookselling.
But the overall impression of Barnes & Noble’s situation in the book industry is not nearly as positive as its owners and investors would like to portray. Publisher’s Weekly reported last week that Barnes & Noble is in the midst of contentious negotiations over terms with Simon & Schuster. “Although the exact nature of the disagreement is not yet clear,” Publisher’s Weekly reported, “Barnes &Noble has significantly reduced its orders from S&S. The main reason for the cutback seems to be, according to sources, Barnes & Noble’s lack of support from S&S.” (One way or another, this means a dispute over the size of discounts and advertising.) Another factor for concern is the impending merger of Random House and Penguin, which is expected to give this corporate behemoth the ability to deal with Google’s Android ecosystem, and Apple’s consumer cachet as well as Amazon’s dominant position in online retailing. There was an initial belief that Borders’ bankruptcy would bring a substantial portion of its in-store business to Barnes & Noble, but that has not turned out to be the case.