Quote:
Originally Posted by SensualPoet
I don't have the opportunity to see B&N with my own eyes.
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You'd probably see people shopping in the store. However the real story is in whether they can make a decent return on profits.
The real problem is that physical bookstores are in the same position as CD/record stores 5 years ago. Margins in retail tend to be razor-thin, and the overhead of a brick and mortar store are substantial -- rent, utilities, cleaning, upkeep, staff, delivery, taxes, local ads. Selection is also limited, by contemporary standards; a book superstore might have 100,000 titles. In contrast, an e-book store with 100k titles is a joke.
Worse yet, the stores still represent a big slice of revenue, and B&N takes a hit to revenue and gets a black eye every time it needs to close stores. And even worse, as the stores lose sales, they lose profitability and drag the company down. They're stuck with an expensive outdated infrastructure, and their business looks like it's dying with every step towards a digital distribution model. Tower Records? Bankrupt. Virgin Records? Gone. Sam Goody, the venerable mall record store chain? Dust.
And to make sure they're getting kicked while they're down, management is feuding with a big investor who wants to take over and kick them to the curb. Even if the current management was 100% on top of its game, something like this is a major distraction and detriment to operations.
We'll see what happens to B&N, but as you can tell I'm not optimistic, and I don't think their management is up to the challenge. If they survive, they'll barely resemble the behemoth that terrified the industry in the late 80s....