Friday, July 19, 2013

How will you be affected if Barnes & Noble closes its doors?

Barnes & Noble at one time was huge. In April of 2006 its stock traded for $46.25 a share on the New York Stock exchange. Its stock price today is $17.97. For those of you who don't know, stock is how a company raises the money it needs to expand. When it falls like this, it means that investors are fleeing in droves, and that's bad.

As a writer who once fancied that it would be nice to see my books on a Barnes & Noble bookshelf, I think that fantasy will always remain a "fiction." I say that not because I don't feel I have the talent to get into one of those stores as a published author. I say that because their company is in SERIOUS trouble. As an amateur investor in stock, I'd have to say I wouldn't give them a penny. It's the "should I catch a falling knife?" syndrome. For those of you who don't invest, the analogy is pretty obvious. If someone throws a knife from a two story window, do you want to be the one that tries to catch it? Not me. I'm gonna let it hit the pavement and get destroyed. That's just the way things are sometimes; that's capitalism.

There are many problems that have plagued Barnes & Noble. For one, they decided to try and get into the ebook game to repeat Amazon's success. The only problem is that this particular strategy runs against their business model. They own brick and mortar stores that feature books, calendars, magazines, a cafe, some wi-fi for a person to use their laptop on, a dvd section, etc. But by selling the Nook, they were telling their customers: stay home and download books. And that's what they did (I live across the street from a Barnes & Noble and in five years, I've probably been inside maybe ten times). That's kind of sad. Without people like me going in, they lost the chance to pitch books from tables, to collect side sales like cookies and lattes from their cafe, and countless other things that I might have bought because the packaging caught my eye.

However, I suppose that the biggest problem is that not enough people want to buy books in retail outlets anymore. That's just a fact. Now, just to be clear, the brick and mortar portion of Barnes & Noble is still profitable by a tiny margin. Analysts on Wall Street believe that it should remain so for the next few years. But it's questionable if the company can survive the absolute hemorrhaging of money that's occurred thus far in 2013. Here's a rundown of the B&N holocaust.

On June 25th of this year, B&N (with regard to its brick and mortar stores) reported a 7.4% drop in revenues and a $122 million dollar loss for the fourth quarter of its fiscal year. For the full year, B&N earned a mere $10 million, compared to $177 million just one year prior.

It gets worse. The Nook division is an unmitigated disaster. It saw a stunning 17% drop in Nook revenues and a staggering $475 million loss thus far this year. Can you imagine losing almost $500 million?

Wow. Just...wow.

So yeah, I think if you're a writer who wanted their books in a Barnes & Noble, or if you are one of those people that thought, "Man...those naysayers will be eating crow when my book is on the shelf at the local B&N, and I'm signing books to adoring fans" you should probably go and take a picture of your B&N because that business is in its death throes.

I wish it weren't true. But it's possible that the only place you will see paper books anymore is through independents or on that aisle in the grocery store. It makes me wonder how the Big Five publishers will deal with the mom & pop stores. So if B&N is tanking, what company is raking it in? The answer is obvious: Amazon.

Here's food for thought: In just ten years, Amazon's stock has surged 2000%. If you had invested a thousand dollars in them in Y2K you'd have 2 million dollars in the bank. Interesting, eh? Amazon will probably get so big within ten more years that it will just buy out Random House, Penguin, Knopf, and all the others with pocket change.

So what do you think? Will Barnes & Noble survive for another ten years? Do you think they can salvage their operation? Can big-style agented New York publishing survive without Barnes & Noble? And finally, how will you be affected if Barnes & Noble closes its doors? I think it would suck to go through all the trouble to get an agent, get your book sold to a publisher, then see B&N implode and shutter all its stores, resulting in you being told that your book is now slated for digital only and then thrown on kindle with all the millions of self-pubs because they have no way to market the paperback version of your book. I wonder how some egotistical writers will react when the "glitz" of a Barnes & Noble is gone, leaving behind a slew of used bookstores filled with cobwebs, yellowing pages, and hippies smokin' weed behind a stack of books propped up on end tables surrounding a flea ridden couch.

I can hear the conversation in my head. "Sue Grafton...over here. What's up my woman? You write some serious mystery." Puts cigarette out in ashtray. "We had five customers yesterday, but with you in da house we prolly get seven or eight. Saweeet!"

It may be a tad bit early but I'm gonna say it anyway. R.I.P. B&N. May the future prove me wrong.

45 comments:

  1. I think book stores like that have been dying by inches for years now, and once ebooks started to gain popularity there really was no going back.

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  2. I feel bad for Barnes and Noble. However, even before ebooks I still usually bought hard copies from Amazon just because they were usually cheaper and easier to find. Less gas, less time and fast delivery. I'm a computer person. I would've liked to see B & N be more competitive online. They needed to bring someone in who could get their website up to speed and compete, but for whatever reason they just never seemed to get what they had to do.

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  3. I wonder if they will survive online? Like Cindy, I think they should've pursued that more. I guess I'm fortunate I did see my books sitting on a Barnes and Noble shelf, but like you, I almost never go in our store anyway. I wonder how Chapters is doing in Canada? I heard the Kobo outsells the Nook.

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  4. Truly not being melodramatic, but I think we, as a culture, will be much worse off if kids cannot spend an hour or two wandering around the magical isles of a book store.

    Will libraries go next?

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  5. I think B&N didn't help themselves with poor management and foresight. Like the music industry before them they wanted things to stay comfortable and easy.

    I love book shops, but the whole culture of giant book superstores that happened during the 90s made book buying soulless and corporate so I don't feel I'm missing much by using Amazon.

    mood
    Moody Writing

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  6. bookstores were never very much alive in my country, sadly :(

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  7. I, too, would miss Barnes and Noble. I've spent so many happy hours in book stores and once owned nearly three hundred art books. Now there are so few book stores and these are usually poorly stocked. I hope this trend reverses itself and book stores make a comeback.

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  8. I can't say I would miss B&N because I hardly ever go in there, but I'd still hate to see them go away completely. Honestly though their prices always seemed significantly higher to me than the prices on Amazon so I can't remember the last time I bought anything from B&N.

    I don't think you're wrong to say RIP, unfortunately.

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  9. I can't remember the last time I went into a Barnes and Noble for more than to use the bathroom--their bathrooms always have such nice paper towels. Mostly when I went it's to the one store in Rochester Hills that has used books because then you can get a better deal. I used to sometimes get books for a buck or less which was pretty sweet.

    The only way for B&N to survive is to downsize. They need to turn their stores into this one coffee shop I went to in Traverse City once. It was like a Starbucks only there was a small section of books, mostly Christian ones. Basically just combine a Starbucks with an airport book shop that just carries the latest Stephen King, Sue Grafton, John Grisham, etc. Because really no one wants to go there to pay $35 for a hardcover or $25 for a DVD or $20 for a CD. Those are all outdated formats.

    I wrote a blog post about what B&N should do a couple years ago. I think mostly I was saying they need to have better service and make sure they have the things people actually want because they'll never be able to compete with Amazon on price.

    As for the Nook I don't have one but their new website sucks butt. It would be fine if you're writing a serial like Andrew Leon's Shadow Spinner but it's such a cumbersome interface if you've already got a finished book you want to load. Their old site was better for that. Between that and the fact I've sold 9 books in the last four months through there I don't see much use for it.

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  10. I think they'll still be around 17 a share is still very healthy. People will still come in for the cafe, and those who will never leave the printed books.

    While the ebook thing might look bad, but if they didn't do the Nook then they'd be like Blockbuster. Refusing to the change until after they were doomed to failure.

    Business is almost like nature. It isn't the strongest or smartest one that survives, just the one most adaptable to change.

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  11. Like you, I imagined and fantasized about my book being there. It’s sad that its dying, but unfortunately, that’s the name of the game, especially with the continued expansion of technology. Maybe they can save themselves by adopting a more online businesses model, but then again, maybe their time is over. Sometimes I feel that businesses operate in a way that normal evolution does. Businesses with bad adaptations become consumed by the driving force of those who have the special skills. Everything has a time span, and perhaps this is towards the end of Barnes and Noble’s.

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  12. The crazy thing about the stock market is that you can actually bet money that B&N will fail. I forget if that's called options of futures, but it does exist.

    Personally, we go into B&N all the time in my family. We love it. But I totally see your point.

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  13. I really hope it survives. I was a B&N bookseller for 5 years and i would be beyond sad to see it go. But they really effed up with the Nook so it will take someone super savvy to be able to save it

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  14. I had the same dream. And if I'm lucky, local B&N will carry my release before the doors close, if only for a day so I can claim the dream. Otherwise, I'd be happy to see the book in any store. :)

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  15. How devastating! I watched sadly as Borders died out. I had one just a few blocks away from my condo... I spent hours in there.

    Barnes and Noble was just an additional block west. They closed their doors because they had lost their lease.

    I LOVE B&N... the charm, the woodwork, the cafe'! It's a wonderful place to escape to when the Chicago is so cold and unfeeling...

    I have that dream to see my books there... Hopefully I'll make it before disaster hits...

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  16. I hope it survives, not only because of my love for books, but because my best friend manages one of the most high-volume stores.

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  17. YIKES!! What will I do if Barnes & Noble closes??? I have online Amazon and stuff, but I relish strolling through book stores and thumbing through books!!! I sure hope they survive!

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  18. We go to B&N once a year, at Christmas, to get our kids nice hardback collections as gifts.

    If B&N wants to survive, they need to change their model to appeal more to local communities and start offering things you can't get online, like local author events and things like that. Unfortunately, they probably won't come around to that kind of thinking. Heck, not even our local independent chain thinks that way. If you're not Gaiman, they don't want you.

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  19. I like going into B&N but I don't usually buy much. An occasional magazine or a gift but seldom books. My family often gets me gift cards and I'll use those for books, sometimes.
    I think B&N will survive for a while because they've taken over a good part of the college bookstore market. But even College students buy lots of their texts from Amazon where they can get good used prices.

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  20. I hope Barnes and Noble survives. I was broken-hearted when Borders closed. I don't want to just get my books online. I'm glad we have some thriving local bookstores here.

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  21. I think one way to make bookstores in general relevant again would be to make books at least as culturally attractive as movies or music.

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  22. My eyes like paper books.

    B&N sells a lot of non-book things like toys and games and calendars. I wonder how that affects their bottom line.

    I bet smaller bookstores will still stay in business or will pop up for people like me.

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  23. As much as it pains me to say this, I do think that B&N is on its way out...unless some miracle happens.

    B&N has always had a somewhat elitist/high-brow feel to them, and I think that's also adding to their downfall.

    Here's what I mean: from a author's perspective, the only way to get into B&N is through a Big 6 publisher. But there's a loophole, you can get in if your book is carried through Ingram Distributors, but even if it is, they still make it fairly difficult to get your book on the shelves. Also, if you wanted to put your self-published ebook up on their website and available through Nook Press...good luck. It's almost like they don't want any author that's not repped by a B6. Their site is far from user friendly and actually getting the book up and going is near impossible. They're alienating authors and customers that could add to their inventory and bottom line. Why would any struggling business want to do that?

    Why waste time with B&N when Amazon makes it so much easier and has a broader reach??

    Anyway, like I said, it makes me sad to look at the truth in this case, but, it looks like B&N is on a fast, downward spiral.

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  24. I love book stores and hate that this country is moving away from them. It was always my dream to have my books featured in them and maybe one day own one. I love Amazon and have been published electronically, but at the same time, this makes me sad.

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  25. I love my Barnes and Noble. This would be so sad :(

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  26. I think B&N will be able to survive for a few more years at least. But they're slowly turning into a relic--I wouldn't be surprised if they went bankrupt and shut down like Borders did.

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  27. I hope you're wrong. But I'm glad that the brick and mortar bookstore in my town is independently owned. I think it'll be around for a while longer.

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  28. It's always sad to see book stores closing. I'm not sure how long print books will even be available to consumers.

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  29. But Barnes & Noble is sometimes its own worst enemy in trying to compete online. When Alex Cavanaugh's second Cassa book came out, I had a Nook. It to B&N over a week to get his book online. By then, Amazon had already sold a bazillion copies. You can't compete with an efficient company if you're not going to be super efficient.

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  30. I think there'll be a rise in more independent book sellers.

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  31. You live across from a B&N and have only been in a few times? I'd have to restrain myself from going in all the time. Bookstores are like an addiction for me -- I love 'em to pieces. I hope B&N survives, but if not I hope the independent bookstores pick up their lost business. There is something beautiful, comforting, exciting about rooms filled with books for sale. I don't care about the bestseller stuff you can get anywhere, instead I want the obscure history book I didn't know existed, the new author not getting attention from the press, the out of print biography I want to read. I lift the heft and feel of a book in my hands. An electronic kindle just ain't the same.

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  32. We don't have Barnes & Noble in Australia but a lot of our bookstores are closing too. A big chain called Borders went bust last year - do you have those in the US?

    It's sad when the big guys go broke but even sadder when the little guys do. Although I have a Kindle, I try to buy paper books from my local independent bookstore every so often. Gotta support the store that stocks my books, after all. :-)

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  33. I used to spend hours in bookstores, and I usually bought one or two books. Then, a while back, books doubled in price, and I could look but I couldn't buy. I then discovered I can read the same books by checking them out of the library. The public library became my bookstore. I still buy a book occasionally from a book store. I've never bought a physical book through the internet, only e-books.

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  34. Oh... it's heartbreaking. And one of those things I "close my eyes to"in hopes it'll go away. I LOVE B & N. And I'm one of those writers whose dream is attached to being on B & N's shelves. But sadly, I think this post is completely spot on!

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  35. Reading some of your comments I agree with a couple- one that said "will libraries go next?" because I worry about that. And the other that Barnes and Noble was their own worst enemy. They started the trend when they started taking other bookstores out of business. Their model of swallowing other bookstores is just wrongheaded. The book business has to thrive everywhere- not be the domain of one big box store because we see what that has led to- Amazon. No one can compete with a store that can sell books without any overhead and without paying taxes for year on end. The Nook thing was a mistake from the word go- not really because it kept people home (although that didn't help) but because they didn't really invest in it. It's not as good as the kindle or the ipad. If your not going to really invest in it, then don't go there. Amazon could do that because they could avoid the shipping charges that came along with some of those best sellers that their customers wanted to buy. But if I want to buy a cheap hard cover of Daniel Silva, then you can often pick those up at your local grocer or Target. Barnes & Noble isn't offering anything interesting and they've taken out the bookstores that did. It's a sad world for books right now but I hope it will not remain so. Authors cannot depend on ebook reader because there is still a large population who does not own an ereader. Hard copies are needed in schools for kids who are learning to read- if you're a YA author and want to reach a broad audience. Maybe more people will get ereaders but it's not clear that the tech phase is headed that way...

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  36. Posts like this worry me. They twist my stomach into knots. I love being in bookstores, whether huge, open ones or tiny, cramped ones. Even when I sleep, I have to be surrounded by books.

    If print books disappear, it better be long after I'm dead. Or it may just kill me.

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  38. I like having a B&N in walking distance, but every visit seems like I'm checking in on an endangered species.

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  39. For people like me, too, bookstores just can't compete with the ultra cheap (and free postage!) Book Depository. There's no way in hell I'd buy a book from a store here for $25 or more when I can get it on BD for $7.

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  40. Hi Michael. Came over to see Yolanda Renee, but this is a great post all the same. Interesting comments too. Barnes & Noble won't affect Aussies too much. The whole book industry is in flux. It must settle down to the new parameters soon.

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  41. *sigh* You took the words right out of my mouth.

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  42. It was much more painful to me when Borders went under. Borders at least was helpful and supportive towards indie authors and artists and Borders created a sense of community in their stores. Barnes and Noble never do that. The only reason why I ever go in there is to meet someone in the cafe.

    Hopefully when B&N go under it'll mean the resurgence of independent book stores in local areas. Those guys have been screwed over enough by B&N.

    Jai

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  43. I think any place with shelves of books is heaven, but as a business maybe not so much. And yet, I would love to own a bookstore!

    I love ebooks, and read many - but I also have shelves of books and wouldn't trade them for anything, well most anything. The first few times I moved, the back end of my truck had boxes and boxes of books. I owned no furniture, but plenty of books.

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  44. I just wanted to thank you for writing this. It's got me thinking about a lot of things bookstore-related lately. And I think you're right about it B&N dying out. It's only a matter of time unless they do something big and creative that saves themselves.

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  45. I love going into B&N to peruse the books, drink some coffee, and just enjoy the environment...but then I go to Amazon to actually buy my books unless I find something on the clearance section. I love B&N, but they're fighting an uphill battle. I'd love to see my books in B&N, but I probably won't get to. I should probably take a few copies to my local store, put them on the shelf, and take a picture.

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