At the end of November, Barnes & Noble, now at their halfway point in fiscal year 2018, released their latest earnings report. The news was disappointing and also entirely predictable: the store’s losses grew, driven by a 6.3 percent decline in comparable store sales against last year. (Absence of a new Harry Potter book makes up half of that decline.)
If you’re new to the declining fortunes of the largest US bookstore chain, here are our most recent reports:
- Will Barnes & Noble Sell Off the Nook Business—and to Whom?
- As Barnes & Noble Struggles, Experts Imagine Life without It
- Barnes & Noble Does Fine on Profits, But Not Sales in Fiscal 2017
This latest earnings report came with the CEO’s assurances that Barnes & Noble would begin to emphasize its core business: bookselling. This was read as a “glimmer of encouragement” by Sarah Weinman at Publishers Lunch (subscription required), although here at Hot Sheet, we’re not as optimistic. Successful Canadian bookseller Indigo has plans to expand into the US next year, and its emphasis is distinctly not on bookselling; Indigo calls itself “a cultural department store,” as we observed last month.
Even though the store’s losses increased, Barnes & Noble is still expected to hit its profit goals in fiscal 2018, as it did in 2017, because of cost cutting. While cuts may be a necessity, we’re reminded of Jeff Bezos’s comments on his business strategy regarding the troubled Washington Post at the time he acquired it: “What they needed was … to stop shrinking. You can’t shrink your way into relevance.” (The paper added 140 reporters under Bezos.)
In line with its cost cutting, Barnes & Noble plans to shrink its stores—carrying less inventory but improving discovery. CEO Demos Parneros said (registration required), “Our goal is to get smaller. We want to actually have a better store, even though it’s a smaller store.” They’re planning for about 40 to 50 percent smaller stores—sometimes even smaller—in terms of square footage.
Bottom line: Barnes & Noble has forecast sales declines throughout 2018, and it has experienced sales declines over the last six quarters, so no one’s expectations are very high. Unfortunately, the store is seeing declines not just in book sales, but also in sales of other types of merchandise—and in foot traffic—so it’s not surprising to see a renewed focus on books. Apparently, the thinking is that returning to Barnes & Noble’s heritage, as Parneros put it, will save the day: “We’ve done recent research that reinforces and validates that, and we want to be the best at selling books. Our publishers are right there with us. They’ve been great partners. Our booksellers shared feedback with us and we know it’s the right decision,” he said during an investor call. As many authors are aware, today’s Barnes & Noble hasn’t always been the most community-friendly store, and its bookseller attitudes and flexibility can vary greatly depending on location. Independent bookstores have been more successful at offering value and inspiring loyalty in customers. Will Barnes & Noble truly be able to act more like a bookseller, each store aligned with its community? Stay tuned.
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.
