Barnes & Noble, the giant US book store is facing an uncertain future. The realities of a shrinking market for print books, competition from Amazon.com Inc., and the costs of investing in its own e-reader and tablets have led to three straight years of losses.
While the chain still has 663 stores, it has closed 63 stores in the past five years. It also has widened its offerings to include educational toys, games and other nonbook categories, which carry higher profit margins. Revenue for that category jumped 12% in the recent Christmas quarter. At the same time, the retailer has cut back on its book inventory: Its stores, depending on size, carried about 21,000 to 170,000 titles in 2013, down from 60,000 to 200,000 titles in 2004.
Leonard Riggio, the longtime chairman of the company, commented that it is hard to nail down a strategy for the future, considering all the influences that are affecting business. In the past, he said “I could say that I could see around corners with ease. Then you reach a point as you get older and as things get more complex, you don’t see as clearly around the corners. You’ve got to have people who do that for you.”
While the company has a strong balance sheet, the question is whether the view around the corner is a friendly one … and whether Barnes & Noble can reinvent itself for a sustainable future.
What do you see around the corner for convenience stores?