B&N to Evaluate Strategic Alternatives-Sale of Company?

[brecklundin]

Originally Posted by kjk

I don't think so...if B&N had a decent share of the eBook market, maybe. But all those brick and mortar stores? And physical book inventory?

It will be curious to see what they come up with-spin off the eBook business? Make the eBook/Nook business their only business and sell the rest? Go private?

edit: Wow, their market cap jumped from $756 million to almost $960 million AH (and after that news). Amazon's market cap? $55 billion.

Yeah, that makes sense...my thoughts were if it would be worth it to get the electronic content agreements with publishers via buying B&N compared to negotiating with the publishers individually. It seems often that is not only a cheaper but more expedient method of acquiring rights to copyrighted/patented material. Of course if the B&N license is tied to the device not the format then no, there is little reason. But I still wonder if there is something in there to buying B&N then selling off the stores themselves or even just closing them down for the write off. Eh, it's a level of business I will never need worry about...

Thanks again for posting your POV on it...it was just WAG on my part as Apple is not really that well positioned ebook content wise...yet...

[SensualPoet]

Originally Posted by fjtorres

Odds Riggio would be making the move if he *didn't* have a deal lined up?
That's how those boys operate: first they line up the deal, then they go through the motions.

Yeah, well, maybe. Keep in mind that at $12/sh Leonard Riggio's options are pretty limited. Frankly, the closing stock price for the past few years would only bring tears of joy to a downhill skier ....

Originally Posted by davidspitzer

according to their balance sheet last year they sold nearly a billion dollars in music, music movies and mobile apps, sounds like content is doing ok for them

Which, actually, is exactly my point: B&N has a lot of good stuff going for it -- retail presence, the college market, a billion dollar online business and a great brand name. I find it really hard t believe that a network of nearly 800 book-stores in the US can't find cost savings synergies beyond closing stores and firing staff. Geez: lots of people buy books and other stuff in bookstores. B&N has the opportunity to really thrive. BUT, it comes back to execution -- minding the details and ensuring the customer experience is as flawless as possible every time you touch the customer.

[Kali Yuga]

Wow. Perhaps I'm over-reacting, but I think B&N is royally screwed.

Originally Posted by SensualPoet

B&N has a lot of good stuff going for it -- retail presence, the college market, a billion dollar online business and a great brand name.

Branding yes. Retail presence is a massive stone around their neck, as sales increasingly shift to online and ebooks. College bookstores may not be a good business for long, as a) textbooks start to go digital b) textbooks start to go open source and c) as the market reacts to major textbook pricing inflation.

And big online revenues don't matter much if you can't make a profit from them.

Originally Posted by sensualpoet

I find it really hard t believe that a network of nearly 800 book-stores in the US can't find cost savings synergies beyond closing stores and firing staff.

They've been squeezing efficiencies out of their business for years, there probably isn't much left to cut.

Not to mention that same-store sales apparently tanked, down over 4%, and likely more to come.

Maybe they will stick around, but I'm starting to think that B&N is roadkill.

[Connallmac]

Originally Posted by SensualPoet

Yeah, well, maybe. Keep in mind that at $12/sh Leonard Riggio's options are pretty limited. Frankly, the closing stock price for the past few years would only bring tears of joy to a downhill skier ....



Which, actually, is exactly my point: B&N has a lot of good stuff going for it -- retail presence, the college market, a billion dollar online business and a great brand name. I find it really hard t believe that a network of nearly 800 book-stores in the US can't find cost savings synergies beyond closing stores and firing staff. Geez: lots of people buy books and other stuff in bookstores. B&N has the opportunity to really thrive. BUT, it comes back to execution -- minding the details and ensuring the customer experience is as flawless as possible every time you touch the customer.

Perhaps taking everything out of B&N's stores other than Nooks, books and the coffee shops and replacing them with Apple hard ware and tech support? Probably cheaper than some of the real estate some Apple stores are inhabiting now. If they aimed to take a real run at the personal computer business and doubling or tripling their market share in that arena.

If not I think that B&N's stores would probably only serve as boat anchors, especially with the cratering of the commercial real estate market that is soon to be coming to a city near you!

[SensualPoet]

Originally Posted by Kali Yuga

Wow. Perhaps I'm over-reacting, but I think B&N is royally screwed. ... Maybe they will stick around, but I'm starting to think that B&N is roadkill.

Originally Posted by Connallmac

Perhaps taking everything out of B&N's stores other than Nooks, books and the coffee shops and replacing them with Apple hard ware and tech support? ... If not I think that B&N's stores would probably only serve as boat anchors, especially with the cratering of the commercial real estate market that is soon to be coming to a city near you!

Ouch! and, Ouch! again!

You could be right ... I don't have the opportunity to see B&N with my own eyes.

Yet I do see lots of people buying physical books and in bricks and mortar locations. I can't believe a creative enlightened retailer can't turn B&N around. Books are not buggywhips. And B&N has the ability to manage and nurture the transition to e-books as its own customers continue to embrace reading in a new medium.

If the foot gets shot off, sadly, it sounds like B&N will be taking aim and pulling the trigger.

[vaughnmr]

Brand mojo, not quite. Could have been, but they rushed out a product that wasn't finished, for the holiday. Then the online store stumbled badly, too. The customer service wasn't even there.

And now they have a little problem...

[SensualPoet]

[QUOTE=vaughnmr;1040944Could have been, but they rushed out a product that wasn't finished, for the holiday.[/QUOTE]

It seems to me the initial Nook problems were fixed in a few weeks or so with firmware patches. On the whole, Nook users here at Mobileread seem to rate the device quite highly. It's just another of the good assets B&N has available to exploit if it can figure out how to do it to bets advantage.

[vaughnmr]

I don't agree at all, although I don't want to dismiss the hardware of the Nook at all. The software/firmware problems were a big deal for several months, and in the mean time the customer service/support/forum was "not up to par, so to speak". This really wasn't a problem with the Nook itself, it was released to the market too soon (and they probably had too, to tell the truth, for the holidays).

[Mickey330]

Originally Posted by SensualPoet

...[snip a bunch of good words to just point to this] ... They have about 1500 stores (I previously stated 2000 in error) and a very deep connection into college book distribution -- a unique niche market. ...

I just want to throw this speculation out there:

B&N may very well be having trouble on the college bookstore side of the house due to this:

"Among the hundreds of new regulations in the Higher Education Opportunity Act (HEOA) passed by Congress in August 2008 are new mandates that require colleges – and more specifically college owned or operated bookstores – to publish the ISBN numbers and retail prices for textbooks, other trade titles, and related course materials that faculty recommend and students buy for classes. ... The ISBN mandate becomes operational in July 2010."

As a college student, I can promise you that I am jumping for joy over bookstores having to use ISBNs. I makes searching for cheaper textbooks [online] that much easier. And yes, I look at Amazon first for used ones. There's some pretty good deals out there on the Interwebz.

So, the one thing that B&N may have been able to rely on - college bookstores - is going to be a little more limited in the future.

Plus - Amazon (there's that company again!) has a new textbook buy-back program. It's very easy now to buy books (used or new) from Amazon and then just send them back for a good price.

Then, there's all the textbook rental places out there.

Who knows what B&N is actually doing - but this announcement about them is a very interesting development in the book-sellers world...

Marilyn

[rogue_librarian]

Originally Posted by brecklundin

hardly an answer to my quesiton...

Actually, it is. Well, an opinion (mine), anyway.

you know as in answering a question with a question.

Feel free to read my reply as "No, I don't think so, because ...".

[rogue_librarian]

Originally Posted by davidspitzer

according to their balance sheet last year they sold nearly a billion dollars in music, music movies and mobile apps, sounds like content is doing ok for them

How much of that billion did they forward to the content creators, and how much ended up in their pocket? Subtract from that costs of infrastructure etc and you still have a profit, sure, but nothing spectacular. Means to an end, as I've said.

[ficbot]

If they really are shifting to a more on-line model, then their proprietary DRM and America-centricness are going to hurt them. If they could develop a well-stocked international e-store on par with Amazon and sell in plain old epub like Sony and Kobo do they might have a shot. But with their fancy only-on-BN-devices DRM non-interoperable with any other hardware, and their pretty much USA-only store, it is hard to see how they can compete with Amazon (or even Kobo) as a major ebook vendor.

[geertm]

Originally Posted by ficbot

If they really are shifting to a more on-line model, then their proprietary DRM and America-centricness are going to hurt them. If they could develop a well-stocked international e-store on par with Amazon and sell in plain old epub like Sony and Kobo do they might have a shot. But with their fancy only-on-BN-devices DRM non-interoperable with any other hardware, and their pretty much USA-only store, it is hard to see how they can compete with Amazon (or even Kobo) as a major ebook vendor.

"plain old ePub" uses a proprietary Abobe DRM. B&N has licenced its DRM (which does not tie you to Adobe) to Adobe, and the new Adobe software for e-reader hardware that supports the B&N DRM is available. New e-readers using the new Adobe software will probably support the B&N DRM. Manufacturers like Sony will have to update their readers with the new Adobe software for them to support the B&N DRM.
Also the new version of Adobe Digital Editions that should be available this year will support the B&N DRM.

[murraypaul]

Originally Posted by geertm

"plain old ePub" uses a proprietary Abobe DRM. B&N has licenced its DRM (which does not tie you to Adobe) to Adobe, and the new Adobe software for e-reader hardware that supports the B&N DRM is available. New e-readers using the new Adobe software will probably support the B&N DRM. Manufacturers like Sony will have to update their readers with the new Adobe software for them to support the B&N DRM.
Also the new version of Adobe Digital Editions that should be available this year will support the B&N DRM.

For all that, they still use a custom DRM that noone else uses, and is not (currently) supported on other eInk devices, unlike standard Adept DRM.

[cfrizz]

Originally Posted by murraypaul

For all that, they still use a custom DRM that noone else uses, and is not (currently) supported on other eInk devices, unlike standard Adept DRM.

Precisely! If they had allowed their books to be purchased & used on ANY eInk devices besides their own they would have been much better off.

So we have to sit around & wait for Adobe to upgrade their software to accept B&Ns books? I don't think so, it should have been there in the first place.

Therefore, I'm not interested in their ereader OR their bookstore!

These dumbass stores are their own worse enemies who NEVER seem to learn from history & keep repeating the same mistakes over & over again.