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Old 01-31-2013, 11:41 AM   #25
Kali Yuga
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OK people, let's keep a few facts in mind.

• The retail stores are still profitable. This is how B&N is still making its living. The "zomg 1/3 of stores closing" omits the fact that B&N will also **open** stores over the next decade, not just close them. I.e. their retail store strategy may actually be working.

Closing big stores and opening smaller ones, by the way, is an expensive proposition that can harm the brand. Smaller stores also carry fewer titles, which exacerbates the "you don't have it?" issue.


• The Nook is killing B&N's bottom line. Supposedly, every $1.00 in digital sales costs B&N $1.50. They've thrown insane sums of money at developing the Nook.

And no, they can't spin it off. It's too closely tied to their brand, website, stores and core business, investors would flee, and the Nook brand would also be heavily damaged.


• International business will not save B&N. First of all, the US is the biggest book market in the world by far, and is B&N's home territory. If they can't make it in the US, where they have a brand history and retail presence, they aren't going to make it.

Second, although it costs nothing for someone from France to go to B&N's website, actually doing business in 50 or 75 new nations is very complicated and expensive. They'll need to open warehouses, they need to navigate dozens of tax laws, they'll need to stock a whole new set of paper books, they'll need to translate their website into a dozen languages, and of course deal with hundreds of international publishers and their subsidiaries.

Amazon already had all of that infrastructure and the branding, and it still took them a long time to do anything more than offer English ebooks to international customers.


• All of us have limited information. We have the quarterly figures. But we don't have the detail on what's selling, which stores in which locations do well, why the Nook business is still running such heavy losses, and lots of other information that is critical to figuring out how to move forward.

Might want to keep this stuff in mind when you insist that B&N turn its business model around on a dime.
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