Hardly a month can go by these days without a depressing development concerning the future of Barnes & Noble. Just before Valentine’s Day, the largest US bookselling chain announced a “new labor model” that eliminates certain store positions to save $40 million annually. For anyone paying attention, the news is not terribly surprising.
First, the chain had a weak holiday season. By their halfway point in fiscal 2018, B&N reported a more than 6 percent decline in comparable store sales against last year. When the latest disappointing earnings were announced, B&N said that profit expectations would remain the same despite a decline in revenue. That means cutting costs. Back in summer 2017, CEO Demos Parneros said that a “company-wide simplification process will take out costs.”
Meanwhile, the Nook digital business is declining. Barnes & Noble has lost about $1.3 billion on the Nook business in the last six years, according to Fortune. At its peak, Nook enjoyed sales of nearly $1 billion a year. Currently, Nook has sales of about $150 million a year. Barnes & Noble’s chairman, Len Riggio, told investors last fall, “There is no business model in technology” for the chain.
What’s particularly upsetting about the layoffs: The store claimed to be “pivoting” back to books in November 2017—emphasizing discoverability and bookselling interactions with customers. But the layoffs appear to target long-standing and full-time staff who would likely be essential to that goal. B&N has declined to indicate how many people have been laid off, but various sources estimate a loss of between 1,600 and 1,800 jobs and/or at least three positions per store. (B&N employed 26,000 people as of April 2017.) For anonymous commenting and reports, scan The Layoff. Also, this Tumblr post summarizes the stats and stories being passed around informally.
Bottom line: Barnes & Noble stock is trading at all-time-low prices. As of this writing, shares are valued at $4.55. The stock is down by more than 30 percent in 2018 alone. Some have speculated that perhaps Barnes & Noble will be purchased and taken private (no longer publicly traded).
Jane Friedman has spent her entire career working in the publishing industry, with a focus on business reporting and author education. Established in 2015, her newsletter The Bottom Line provides nuanced market intelligence to thousands of authors and industry professionals; in 2023, she was named Publishing Commentator of the Year by Digital Book World.
Jane’s expertise regularly features in major media outlets such as The New York Times, The Atlantic, NPR, The Today Show, Wired, The Guardian, Fox News, and BBC. Her book, The Business of Being a Writer, Second Edition (The University of Chicago Press), is used as a classroom text by many writing and publishing degree programs. She reaches thousands through speaking engagements and workshops at diverse venues worldwide, including NYU’s Advanced Publishing Institute, Frankfurt Book Fair, and numerous MFA programs.
