B&N bunts and then forgets to run to first
To support these efforts, we are focused on attracting, retaining and developing top talent throughout the organization.I hate to say it but the continuing saga of Barnes & Noble is starting to bear too many similarities to the last year or so of Borders. The upper management makes sweeping statements meant to reassure stockholders. Yet, a close look at those statements shows they contain holes big enough to drive a tank — or a fleet of them — through. New agendas are announced and new programs put into place. Yet nothing really changes. Why? Because the suits at the top simply refuse to understand the changes in the industry and admit they’ve screwed up and need a new playbook.
The first misstep is the announcement of the new “book club”. Now, book clubs in bookstores is nothing new. In fact, locally owned bookstores have had them from the beginning. I can remember times when book clubs met at our local B&N. But this one is “different”. How? First, it’s “seasonal”. (Whatever the hell that means because the first title doesn’t yell “summer” to me.) Second, every B&N across the nation will be having the same book club/reading the same book at the same time. Oh, and you’ll get free coffee and a cookie. Whoopie — not.
Before I get into my questions about how these nationwide meetings will be held, let’s talk about something else B&N is doing. There will be “special editions” of the books being read. These will include a reading group guide and a special essay by the book’s author. For the moment, the pre-orders of the first book’s special edition are priced the same as the regular edition. But pardon me if I find myself wondering how much the markup will be if someone decides to buy the book in-store just before the meeting.
Oh, and the book they’ve selected as the first to be read? The Female Persuasion, by Meg Wolitzer. Here’s the description from the article:
Meg Wolitzer’s The Female Persuasion centers on Greer, a shy college student who becomes enamored with the fiery, feminist rhetoric of visiting speaker Faith Frank. Years later, Greer goes to work for Frank at the Loci Organization. But as other areas of her life begin to crumble in the dream job’s wake, Greer finds herself growing disillusioned with Frank and the Loci Organization, as she discovers that even her heroes are imperfect people.
Now, for the first ever book club meeting, why would a struggling company choose a book with a limited audience? I don’t know about you, but that’s not a book that’s going to have me giving up an evening to drive miles from home to sit around with folks I don’t know to take part in a discussion that will, in all likelihood, that will devolve into politics.
To me, this looks like too little effort on their part and effort taken too late. Oh, and one more question. Why wait until May for the first meeting? Couldn’t they have chosen a book already out and rolled this out sooner? Instead, they want to make sure everyone reads the book at the same time (even though it will have been out some weeks before the first meeting). Yeah, right. Anyone want to make bets these book club meetings are being underwritten by the publisher?
More proof B&N suits are either fooling themselves or think we, the buying public, are too dumb to see the writing on the wall comes in the CEO’s comments on last quarter’s finances. On March 1st, Demos Parneros did his best to make things look better than they seem to be from this side of the equation. To start, and to indicate the lack of interest in the call, there were only two financial analysts taking part. Two. If that doesn’t show a lack of faith in the company, I’m not sure what does.
Some basic facts to keep in mind, no matter what sort of spin Parneros tried to put on them. December sales were down at a time when the trend in retail was for greater sales. January sales were down 3.5% as well. third quarter comp sales were down 5.8%. Of that, book sales declined 4.1% while there was a double-digit decline in music, video and gifts. Toys and the cafe sales “somewhat offset” all that.
So, how does Parneros plan to stop the bleeding?
[W]e remain focused on executing initiatives to invest in, evolve and grow our core businesses while at the same time improving profitability by operating more efficiently. Our near-term initiatives are focused on reducing expenses and stabilizing profits to support our long-term goals of growing the business through new stores and expanding our omnichannel capabilities.
To position our business for growth, the foundation of our strategic plan is built on four pillars. One, strengthening the core. Two, improving profitability. Three, accelerating execution. And finally, number four, innovating for the future.
All that sounds good until you start looking at what he says and, of course, looking at BN’s history.
So what are they going to do?
- Launch the ship from store when you order online. The explanation for this is that it will improve shipping speed and cost delivery costs. Except, as we are seeing from employees themselves, this isn’t what really happens. The books aren’t necessarily being shipped from the nearest store to the customer. Worse, at least for the stores involved in the shipping, an employee is being taken off the floor to pull the book, prepare it for shipping and sending it out. Add to that the fact the stores apparently aren’t getting credit for that sale and, well, it is an accounting mess that can be boiled down to “Robbing Paul to pay Peter.”
- Later in the year, they’ll be launching a new variation of their order online and pick up in store. This time, supposedly, you’ll be able to pick the book up in an hour. Riiiight. I’ll be live that when I see it, especially since I can look online for a book, be told a store has it in stock and get to that store in an hour and they won’t know if they have the book or not. Unless and until BN improves its tech side and inventory system, this is going to be nothing but a big fail.
- They are going to push the membership program more (another complaint of those employees not caught up in the purge last month because they are supposed to focus on selling memberships as much, if not more, than they are to sell merchandise). Of course, to BN, the membership program is basically free money. We are paying them for discounts we can get from Amazon and elsewhere for free. Nope, not gonna fly.
- Improve profitability
- “recent action to transition to a new, more efficient store labor model that provides greater flexibility and better customer service by eliminating tasks and allowing booksellers to focus more on customers.” This action was to layoff full-time employees who either were cashiers, tech employees or backroom/receiving employees. In other words, people who took money and the people who put out books and took books off the shelves. Now you have part-time employees who see no reason to be loyal to the company based on how it treated loyal employees, part-time employees trying to fill more than the roles they were hired for. Right, that’s really going to give them more time to focus on customers.
- “our team is focused on doing a thorough review of all areas of the business, with a goal of reducing expenses in other areas such as logistics and direct procurement, to name a few.” Hmm, I seem to remember hearing something similar each quarter for how long? Perhaps instead of worrying about logistics and procurement, they need to look at things like stores that are too large and rents that go along with them. Or how about looking at the suits in the hallowed halls of corporate leadership? Of course, they won’t do the latter and the former they are tied into the terms of leases and such — because they were too focused on being big instead of watching retail trends like other companies.
- “The third pillar is to accelerate execution. To accomplish this, we need to be simpler, faster and more decisive. . . To support these efforts, we are focused on attracting, retaining and developing top talent throughout the organization.” Unfortunately for the rank and file, not to mention the buying public, he doesn’t mean where it counts — in the stores. Nor does he mean doing so in the upper levels with people who aren’t afraid to do real innovation and to make the difficult decisions. No, he means folks who will go along with the same ole, same ole, or at least that’s the way it seems to me.
- The fourth pillar is innovation, something BN has been less that stellar at in the past. “We are excited to announce that later this year we will open five new prototype stores that feature a smaller format and new design. This rightsized format will have a new look and merchandise focused on books and other categories that are more reflective of today’s business model.” Now, the CEO is remarkably silent on what this “rightsized format” will be and how it was determined. Nor does he say how these stores will differ in what they offer from the larger stores. All we know is that they will be “smaller” but by how much?
In the Q&A section, you can see how proficient the CEO is at avoiding real answers. It is all song and dance with little to inspire confidence, at least for me, in the company. Unfortunately, this reminds me all too well of those last two years of Borders. I spent a great deal of time during those months writing about the bookseller and how every move seemed to come too late and do too little. I’m afraid we’re seeing that with BN now.
Why is this important? Because there are still too few smaller bookstores out there. Borders, Barnes & Noble and others — and yes, to an extent Amazon — have seen to that. But before you jump on the hate Amazon wagon, the damage was done to the locally owned stores long before Amazon came onto the scene.
If BN goes under, it will cause a tsunami through traditional publishing because, even though Amazon is where the majority of their books are sold, they are still tied to the old mindset that they need bookstores. How they adapt now, not later, very well may indicate how well they will survive if BN does go under.
Publishing is changing and those who continue to fight the trend will soon see themselves facing the same issues BN does now.