Barnes & Noble closed its Fifth Avenue and 18th Street doors Monday night in Manhattan, saying goodbye to one of its central bookstore locations. It also closed its college bookstore at 105 Fifth Avenue, a store that had been in business since 1932. All totaled, 15 to 20 locations are reportedly closing within the year. It is no surprise then that publishers are getting anxious and concerned about what the future holds for the chain, especially with the decline of digital sales.
Barnes & Noble is known as one of the last standing corporate bookstores. Companies like Amazon and Apple have almost successfully cornered the market. They’ve been able to put a once former competitor like Borders to bed with a nice story illuminated by the calming glow of an iPad. The chain store closed shop in 2011, leaving 650 stores vacant in its wake.
Holiday revenue totaled $125 million for the chain’s Nook division. This represents a 60% drop in sales of digital services compared to the same time period of the previous year. The 673 retail stores fared much better with holiday sales showing only a 6.6 percent decline from last year’s $1.1 billion. These “brick-and-mortar” bookstores include toys, greeting cards and other gift items. In-store browsing often leads to customers making additional purchases.
It is worth noting that Barnes & Noble’s positive attitude has something to do with the new CEO, Michael P. Huseby. As the former president of Barnes & Noble and chief executive of Nook Media, Huseby joined the bookstore giant as chief financial officer in March 2012. According to the company press release dated Jan. 9, 2014, the new CEO is pleased with the “holiday sales results,” noting especially the “core comparable bookstore sales.”
Can Huseby help keep up with an ever growing market that is constantly eager for change? He explained in an interview that the digital branch, Nook Media, took a lot of hits over the previous holiday season due to the release of two new devices. This year, instead of releasing a new product, the plan is to sell “existing high-quality devices.”
The company’s Nook division has faced increased competition from Apple and Amazon, while other retail booksellers offer huge discounts on books. This cuts into Barnes & Noble’s own pricing. It also concerns publishers as digital publishing continues to grow, not just with full-length books but also with short stories. Publishing companies have moved a lot of their marketing to websites and and online social media, but there has long been something about seeing books advertised in the window of Barnes & Noble that conveys a sense of trust.
Huseby is committed to keeping Barnes & Noble from further digital decline. He is looking into forming new partnerships with manufacturers of other digital devices but plans have not been completed. The Nook first came out in 2009. Since then, over 10 million have been sold. That sounds like a large number but not when compared to Amazon’s Kindle Fire, which sold approximately 4.7 million just last quarter.
By Joseph Kibler