The jury is no longer out…
Not George Zimmerman’s murder trial, I’m talking about the pending demise of bookstores (and down the road libraries). You don’t have to drive very far to pass the fossilized remains of once booming businesses like Blockbuster Video. Drive into Lawrence on K10 for a KU basketball or (shudder) football game and you’ll pass one.
Blockbuster didn’t even have enough pride or cash left to strip the signage off its building, so it stands as a high profile reminder that DVDs and retail video rental are not long for this earth.
Kinda makes you feel sorry for what remains of the once giant corporation. Until you think back to the thousands of mom and pop video stores Blockbuster ball-busted.
It’s safe to say we all know what’s going on with newspapers and magazines today.
Remember when tiny Rainy Day Books in Fairway stared death in the face when Borders Books opened at 75th and Metcalf? Then Barnes & Noble opened on the Plaza and the talk was that another massive book retailer might open in the new Mission mall on Johnson Drive (now to be anchored by Walmart).
Well, Borders is history. Even people in Lawrence – many of whom found its presence here corporately obtrusive – lament its passing two years back. It was a nice place for locals, college kids, teens and parents with kids to loiter, pour over magazines, check out the local books kiosk and lay actual eyes on the covers of new nonfiction or fiction releases. Maybe grab a latte and kick back and study or get some work done on your laptop.
That’s all history now.
For Kansas Citians Barnes & Noble continues to fill that bill. But for how long? Not much longer, I suspect. Yesterday it’s CEO abruptly resigned.
“Barnes & Noble hasn’t been doing particularly well as of late, and here’s another blow: company CEO William Lynch has resigned, effective immediately,” reports The Verge. “Lynch, who took over the CEO role in 2010, was responsible for helping the bookseller transition its business to digital, and to deliver that content to customers with the Nook line of e-readers and tablets. After Nook sales plummeted the last two quarters, though, the company decidedto stop manufacturing Nook hardware itself and rely on third-party hardware partnerships to keep the ecosystem going.”
The company recently announced that for the Feb-April quarter its net loss totaled $118.6 million compared to a loss of $56.9 million a year ago.
They’re losing their ass on the Nook and are firesale-ing off the company’s remaining inventory while crossing their fingers hoping Microsoft or somebody will take over Nook production. Meanwhile, smelling blood, Amazon just slashed the price of its Kindle reader by 15 percent.
The $64 million questions; will Barnes & Noble survive and should we care?
The Motley Fool investment site attempted to answer the latter.
“Once upon a time, the book superstore elicited two major responses,” the item begins. “One: I’m in heaven; here are more books I’ve ever seen in one place, ever! Two: This is hell on independent bookstores; it’s a sad time indeed.
“Today, everything’s come full circle. Borders failed, and even though one huge rival was wiped off the map, Barnes & Noble (NYSE: BKS ) is showing serious signs of losing to its aggressive competition.
“Some investors may be studying Barnes & Noble as a value play, but they’d better think twice. Not only is the bookstore chain in big trouble, but if it fades from the scene, maybe in the long run, nobody would even really care.”
Amazon’s arrival on the scene in the 1990s was a harbinger of the changes to come, the Fool continues.
“Recall that back in the old days, the idea that books and music would sell over the Internet was by no means a foregone conclusion. E-commerce was in its infancy. The tech bubble wiped out many early dot-com companies, even some that were good ideas but ahead of their time.
“We now know that Amazon not only survived, but it’s ingratiated itself into the fabric of many consumers’ lives. It’s so much more than an online book and superstore; its model started weakening bookselling chains Borders and Barnes & Noble long ago. Amazon’s ability to track down just about anything and send it straight to your door was the next evolutionary step that spelled the beginning of the end.”
Now a little gossip.
“There’s an even more ominous theory circulating, as reported by The Wall Street Journal: that Barnes & Noble has been slowly putting more emphasis on selling odds and ends than actual books,” the Fool continues. “Browse any Barnes & Noble and you’ll see toys, games, journals, and an array of things that don’t really relate to the act of reading. Rumor on the street is that publishers are having a harder time getting to Barnes & Noble’s shelves, and the retailer is increasingly peddling high-margin merchandise that’s more gift shop than book shop.
“Although Barnes & Noble denies the allegations, the Journal‘s chats with those in the industry have revealed indications of some reduced orders of books and less varied assortments.”
The fiscal year ended May 1, 2010 was the last year B&N generated a profit.
And while that’s only three years ago and the economy has been in the dumper, the unfortunately reality is, it still constitutes a trend.
Similar to the undertow that is rapidly carrying Best Buy down the drain.
The flip side of this unfortunate news? The Rainy DayBooks of the world are rebounding, the Fool says.
The bottom line:
“There may be happy endings for Amazon investors and great independent bookstores, but Barnes & Noble will likely end up shelved under tragedy,” the Fool somewhat obviously concludes. “It’s incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies.”
Buh bye B&N and Best Buy.
I hope the prosecutor in Sanford Florida doesn’t read about this, I will probably be indicted for B&N going out of business.
Maybe if B&N starts selling Skittles and Arizona Watermelon Fruit Drink for “Purple Drank” they can get back in the black. I should warn them though, I was on my back with a black and it didn’t work out so well.
George just cracks me up.
Must be “Gallows Humor”.
Where’s harley gonna go to browse Out, Genre, The Source and hello mr?
Smarty, I wrote a story to answer your question above on one of my huge, national blogs; go check it out.
I read everyday and love reading books. But a Kindle just doesn’t do it for me, I like the feel of that book in my hand. A lot of what I read comes from Amazon or the local library. B&N and Borders for some is ok just wasn’t always the answer for me. Plus Amazon could always get my wants as in ordering a book to me faster than B&N or Borders ever could. So was a faster service issue for me.
Yep, whenever I’m looking for a book at Barnes & Noble and they don’t have it, they quickly offer to order it for me. But the prospect of waiting, then having to return there to pick it up is a little off putting and I never take them up on the offer.
The wait doesn’t seem so bad when the entire process goes down online. Which is too bad, because I think we’ll all be worse off when B&N blows taps in a few (if we’re lucky perhaps) years.