B&N 10 Year Plan - Try your hand

[darryl]

One very important factor is the future of print books. Personally I think EBooks will eventually take most but not all of the market assuming small incremental improvements in reader technology rather than a quantum leap, which is of course also quite possible. I think over a generation or more print books will probably contract to a large niche market. (Or, of course, as another poster said, ebooks may reach their peak market penetration tomorrow and stay their or decline. My crystal ball is not infallible). In B&N's case, the trick has got to be managing the decline. To recognise if large stores need to be closed, if they need to be replaced by smaller ones, if they need different product mixes etc. If EBooks are going to dominate, they need to be prospering in that market sometime in the not too distant future to survive in the longer term. Or they need to have an exit plan or diversify. What happened to the carriage makers when cars came along. I'd imagine some folded, some made car bodies, perhaps some of the bigger ones made cars. Perhaps some got into related fields where their expertise was useful. Or maybe they want to be the biggest fish in a much smaller pond. Perhaps a bit of vertical integration can see this come true.

For Kali Yuga, a nice cautionary post, but don't forget the fun. No doubt like others here, my book on how to make a successful small business would probably start with the line "Begin with a very large business". Even if I did have access to their accounts and other information, I don't really pretend to have the expertise to guide B&N through this minefield. Just a nice intellectual exercise based on the little we do know. Perhaps with the odd interjection now and then from someone who really is an expert and the odd one who really is an idiot.

[murraypaul]

Originally Posted by Kali Yuga

• The retail stores are still profitable.

Are they?
Actually profitable, not at earning-before-nasty-stuff level?

[Kali Yuga]

Originally Posted by fjtorres

That psychology worked for a couple decades...

Until it failed.

B Dalton, Walden, Brentano's, most of the small chain stores -- along with 2,000 indie bookstores -- are gone. They can't hold enough titles, and don't have space for other now-expected things like a café.

It doesn't work for casual readers, because they're buying 1 or 2 books a year from Walmart and Target, or online, or in ebook form. They don't buy enough to keep the small stores afloat, especially if the small store can't compete on price.

It doesn't work for heavy readers, because they either buy online, buy in ebook form, or browse the books in the store and then buy it online.

Not to mention how closing big stores and opening smaller ones would be shooting themselves in the foot. It's expensive and harms the brand to close the store, break the leases, move the inventory etc; it's expensive to open a new one; it's highly disruptive for the staff.

It's not the solution.

[Kali Yuga]

Originally Posted by murraypaul

Are they?
Actually profitable, not at earning-before-nasty-stuff level?

As far as I know, yes.

The Nook business lost $77 million in Q4 (on revenues of $164 million). B&N's net loss for the quarter was $57 million. This is typical for the Nook, it's a bona fide money pit.

Same-store sales were up 4.5% for Q4 (the Borders effect). For the college stores, it was 2.2%, and supposedly they landed some additional college contracts.

I don't think that sticking with the stores really was viable. But they desperately need to control costs on the Nook.

[Andrew H.]

Originally Posted by derangedhermit

10 year plans are useless. You can have a statement about what kind of company you will be in the future, and a 5 year plan - but you have to be continually rethinking and revising the 5 year plan.

Ten year plans are not useless in a world of 10 year retail leases. No one who makes these plans believes that they can possibly predict the future. But when the concrete question is whether to renew your 10 years lease or not, you need to have some sort of an answer. And having a 10 year plan is almost certainly better than not having one.

[derangedhermit]

Originally Posted by Andrew H.

Ten year plans are not useless in a world of 10 year retail leases. No one who makes these plans believes that they can possibly predict the future. But when the concrete question is whether to renew your 10 years lease or not, you need to have some sort of an answer. And having a 10 year plan is almost certainly better than not having one.

My answer as CEO of B&N would be "No" in all cases. I wouldn't sign up for anything past 5 years. If it meant moving, then I'd move.

Nobody can tell what the world will be like in 10 years, especially in retail, especially when the market is increasingly involved in electronics and software. Spending C-level time on 10 years from now, other than once a year to talk with the staff futurists, is a waste.