March 1, 2018
In an age of ecommerce, Amazon and free shipping, Barnes & Noble is putting on a brave face despite fiscal appearances of a “dead retail chain walking.”
The chain reported a third-quarter (ended Jan. 27) loss of $63.5 million, which was an improvement from a loss of $70.2 million during the previous-year period. Revenue declined 5.3% to $1.2 billion from $1.3 billion.
Specifically, retail sales topped $1.2 billion, down from $1.27 last year. Nook segment revenue, which includes digital, consumer electronics, dropped almost 20% to $30.9 million from $38.4 million.
The declines underscored a same-store decrease of 5.8% primarily due to lower foot traffic. Alarming, considering the period included the winter holidays when even non-readers frequent bookstores – and merchandise includes DVD/Blu-ray Disc movies and TV shows.
“While we were disappointed with our holiday sales, comparable store sales trends did improve in January,” CEO Demos Parneros said in a statement.
Perneros is Barnes & Noble’s fourth CEO since 2013, upgrading from the COO position last April after former CEO Ronald Boire was fired.
The executive is saying all the right things, including strengthening the core business by “enhancing the customer value proposition,” improving profitability through an “aggressive expense management,” which he says will fund growth initiatives, simplify the retail experience and innovate for the future.
“We have initiated a strategic turnaround plan that is centered on growing the business and enhancing shareholder value,” Perneros said. “In the short term we are focused on stabilizing sales, improving productivity and reducing expenses.”
In February, the chain implemented a companywide expense reduction plan, including a new store labor model that provides greater flexibility by eliminating tasks and allowing employees to focus more on customers. It estimates these actions will result in annual cost savings of about $40 million.
But short of becoming Amazon, which launched as an online bookseller during the dotcom era, B&N is treading water.
Indeed, purchasing Oscar-nominee DVD, Darkest Hour, at B&N.com costs $25.17 — and $17.96 on Amazon.