B&N CEO on the future of Nook

[Paperbackstash]

Ouch. Some unfortunate losses. I'm sure bookstores are bleeding money right now

[ZodWallop]

Yeah, the news about the graphic novel buyer bubbled up in my news feed a few days ago.

[fjtorres]

Originally Posted by Paperbackstash

Ouch. Some unfortunate losses. I'm sure bookstores are bleeding money right now

I found this most interesting:

The location at 86th St. and Lexington Ave. operated for 12 years "but is now too large, and too expensive, for our needs," according to a spokesperson. The store will close by September, according to the notice.

It reminded me of this:

https://www.nytimes.com/2020/05/29/o...ness-rent.html

In France, the government offered to suspend rent for small businesses closed during the lockdown, so that when the country reopened, stores and restaurants could, too.

In New York, by contrast, the meter is ticking every day. When the shutdown is over, small-business owners like me will be expected to pay our back rent, despite months of lost revenue. And our excessively high rents will remain in place even though fewer customers may be allowed in our shops, fewer diners in our restaurants, fewer clients in our salons.

The mall apocalypse is only the begining.

(Also, as the second OP makes clear, those "excessive" rents aren't actually excessive but rather market-based. The landlords just aren't willing to subsidise low revenue businesses.)

[ZodWallop]

Originally Posted by fjtorres

I found this most interesting:

But Daunt has already said he wants to scale down to smaller, more stores*, so this isn't that shocking.

*didn't he? I remember him saying that, but I may be confusing it with speculation here on MR

[fjtorres]

Originally Posted by ZodWallop

But Daunt has already said he wants to scale down to smaller, more stores*, so this isn't that shocking.

*didn't he? I remember him saying that, but I may be confusing it with speculation here on MR

The bolded part was "too expensive", which brought up the matter of NYC rents because a lot of people are counting on B&N's new owners coming in with "deep pockets", to save Nook.

Daunt firing all new employees over the lockdowns, delaying publisher payments, firing the book buyers, and closing shop in NYC over money all suggest the pockets he's working with aren't all that deep.

So far, they've opened a couple of new format, smaller stores, but nowhere near as many as they've closed.

As for growing the chain I don't recall him saying it directly but rather hinting at it, by saying the US is "underbookstored".

I took the statement as a negative at the time because it showed a lack of understanding of US population distribution and the modern US retail environment.

Even small bookstores need big populations within a reasonable distance and the reason B&M bookstores have been withering is because "reasonable distance" has been shrinking all decade. (For all B&M; hence the mall apocalypse.) The number of population centers maintaining enough foot traffic to support even a small B&M store is lower than the existing store coubt so I seriously doubt there is room for much if any expansion, even with the steady closure of Independent stores.

And that was before the lockdowns.

My expectation is he will be closing big stores and opening new, smaller ones but the net will be a (quiet) reduction in store count.

[ZodWallop]

Originally Posted by fjtorres

The bolded part was "too expensive", which brought up the matter of NYC rents because a lot of people are counting on B&N's new owners coming in with "deep pockets", to save Nook.

Daunt firing all new employees over the lockdowns, delaying publisher payments, firing the book buyers, and closing shop in NYC over money all suggest the pockets he's working with aren't all that deep.

So far, they've opened a couple of new format, smaller stores, but nowhere near as many as they've closed.

As for growing the chain I don't recall him saying it directly but rather hinting at it, by saying the US is "underbookstored".

I took the statement as a negative at the time because it showed a lack of understanding of US population distribution and the modern US retail environment.

Even small bookstores need big populations within a reasonable distance and the reason B&M bookstores have been withering is because "reasonable distance" has been shrinking all decade. (For all B&M; hence the mall apocalypse.) The number of population centers maintaining enough foot traffic to support even a small B&M store is lower than the existing store coubt so I seriously doubt there is room for much if any expansion, even with the steady closure of Independent stores.

And that was before the lockdowns.

My expectation is he will be closing big stores and opening new, smaller ones but the net will be a (quiet) reduction in store count.

Overall I don't have alot to debate. But I do think connecting all the brick and morter stuff to the future of the Nook is a leap.

Barnes and Noble's brick and mortar strategy of mega-stores everywhere is just not viable and changing it by closing larger stores and replacing them with smaller ones seems reasonable.

I just don't know that that has anything to do with their ereaders.

Now, look. I'm not expecting a huge cash infusion to the Nook. All I really got out of the original message is that B&N had abandoned any sort of development of the Nook and sales of ebooks. He didn't think that was a good idea and there would be some investment of some sort.

Investing in selling in ebooks and then perhaps using that to allow their international stores to start selling ebooks (branded under a different name if Nook is so tarnished internationally) doesn't seem like the worst idea in the world. Especially since B&N already has all the basics in place. They aren't starting from the ground floor.

[fjtorres]

Originally Posted by ZodWallop

Overall I don't have alot to debate. But I do think connecting all the brick and morter stuff to the future of the Nook is a leap.

.

They are owned by the same people and, more importantly, funded by the same pocket.

If forced to triage operatings, what goes first? Nook, bookstores as a whole, or B&N.com? Nooks survives, oddly enough, on it's small size and minimal commitment; it costs very little to keep around. But that also limits how much money they can throw at it.

Daunt has a to-do list of projects and, unless he's lying, revamping the stores and maintaining free cash flow is tops. Cash flow pays reht and employees. Profitability can come later; he needs to maintain total sales volume because, after all, pbook prices are tied to volume. His talk of growing the nujber of stores is him telling the publishers that the new stores will carry less books each but he'll make it up to them with less returns and (maybe) more stores.

Nook costs don't depend on volune, thanks to agency; it can be backburned until job one is under control. Which it isn't.

[John F]

Originally Posted by fjtorres

Not many are, even much bigger ones.
(Borders and B&N store closures even in large suburbs prove it.)

In fact, bookstores have always been rare outside the biggest cities.
That's one of the reasons Bezos ramped Amazon up via books.

Sorry for the late response...

Depending on the definition of rare and biggest.

I was under the impression that there were a lot of bookstores in big, medium and even smaller (as well as biggest) cities. The mega bookstores and Amazon may have reduced this, but they were/are there.

For example, doing a Google on bookstores for my state (CT) I get a 180 hits, many (more than a few, less than a lot) of which are not in the biggest.

[fjtorres]

Originally Posted by John F

Sorry for the late response...

Depending on the definition of rare and biggest.

I was under the impression that there were a lot of bookstores in big, medium and even smaller (as well as biggest) cities. The mega bookstores and Amazon may have reduced this, but they were/are there.

For example, doing a Google on bookstores for my state (CT) I get a 180 hits, many (more than a few, less than a lot) of which are not in the biggest.

Yes, it depends on the definition.
But we are talking about B&N, so:

How many of those are full, new release and backlist commercial book stores?
How many are newstands and airport shops?
How many are rare book or used paperback shops?
How many are college stores?
How many are religious stores?
How many are art supply stores or gift shops?

If you're going by the ABA listings, they include all of the above.

As I recently saw somebody point out on the same topic: how many of those are likely to carry Harry Potter? Patterson? Tolkien?

Speaking of the ABA:

https://en.m.wikipedia.org/wiki/Amer...rs_Association

The ABA's membership has varied over time:

1991 — 5,200 members[4]
1995 — 5,500 members with 7000 stores[5]
1998 — 3,300 members[4]
2000 — 3,100 members with 4000 stores[5]
2001 — 2,794 members[6]
2002 — 2,191 members[6]
2005 — 1,702 members,[7] "more than 90" member bookstores opened[8]
2006 — 97 member bookstores opened[8]
2007 — 115 member bookstores opened[9]
2008 — ABA published no data
2009 — 1,401 members[10] with 1,651 stores,[11] 40 member bookstores opened,[12] 26 of which were listed by Google Maps as "permanently closed" in December 2018.
2010 — 1,410 members, first increase in almost two decades.[10] 26 member bookstores opened,[13] 14 of which were listed as "permanently closed" on Google Maps as of December 2018.
2011 — 1,512 members with stores in 1823 locations,[14] 41 member bookstores opened,[15] Used bookstores are now eligible for membership, annual dues of smaller stores are lowered.[16]
2012 — 1,567 members with stores in 1,900 locations,[17] 43 member bookstores opened[18], 17 of which were listed as "permanently closed" on Google Maps in December 2018.
2013 — 1,632 members with stores in 1,971 locations,[19] 45 member bookstores opened[20], 16 of which were listed as "permanently closed" on Google Maps in December 2018.
2014 — 1,664 members with stores in 2,094 locations,[11] 59 member bookstores opened[21], 15 of which were no longer members and listed as "permanently closed" on Google Maps in December 2018.
2015 — 1,712 members with stores in 2,227 locations,[11] 61 member bookstores opened[22], 14 of which were listed as "permanently closed" on Google Maps in December 2018, 3 others are marked "online only" in ABA's list.
2016 — 87 member bookstores opened[23]
2017 — 75 member bookstores opened[24]
2018 — 99 member bookstores opened[25]
2019 — 111 member bookstores opened[26]

Being generous and allowing for gift shops, art supply stores, etc, they can claim maybe 2500 locations. That is half their peak in 1995. Back then, the US had 263M population vs 333M today. So half the stores have gone away over one generation, while population grew by about a quarter.

Mainstream bookstores are maybe half the claimed number.

For contrast, there are 10,000 different sales tax jurisdictions which are a good enough proxy for number of total population centers/communities, no?

https://taxfoundation.org/state-sale...pproach-10000/

Or, you could go with the number of metropolitan areas of over 50,000 population. That is 500. Those smaller cities might be lucky to have one real bookstore.

https://en.m.wikipedia.org/wiki/List...es_urban_areas

Either way, considering how bookstores are concentrated in big metro areas, Daunt is correct, the US is "underbookstored". As he sees it.

But that is because people are spread out all over: the US ranks 177th in population density at 100 people per square mile versus the UK he is familiar with, at 51, and 726.

That is because 85% of the population in the top metro areas (>1M) resides in the suburbs and exurbs, not the city centers. And then there's the other 450 metro areas and the smaller towns and cities.

So yes, if you have in the bigger coastal cities you probably have no shortage of B&M bookstores. Chicago, too.

But for most of "flyover country" full service bookstores are not abundant and *never* have been. There just aren't enough readers within reasonable driving time. That is why Amazon book sales grew so big so fast.

And, as noted above in the Wikipedia ABA listing, the number is steadily going down. B&M bookstores are not, as a whole, a particularly profitable business.

Among the non-chain stores, breaking even is a triumph.

[John F]

Originally Posted by fjtorres

Yes, it depends on the definition.
But we are talking about B&N, so:

How many of those are full, new release and backlist commercial book stores?
How many are newstands and airport shops?
How many are rare book or used paperback shops?
How many are college stores?
How many are religious stores?
How many are art supply stores or gift shops?

If you're going by the ABA listings, they include all of the above.

As I recently saw somebody point out on the same topic: how many of those are likely to carry Harry Potter? Patterson? Tolkien?

Speaking of the ABA:

https://en.m.wikipedia.org/wiki/Amer...rs_Association



Being generous and allowing for gift shops, art supply stores, etc, they can claim maybe 2500 locations. That is half their peak in 1995. Back then, the US had 263M population vs 333M today. So half the stores have gone away over one generation, while population grew by about a quarter.

Mainstream bookstores are maybe half the claimed number.

For contrast, there are 10,000 different sales tax jurisdictions which are a good enough proxy for number of total population centers/communities, no?

https://taxfoundation.org/state-sale...pproach-10000/

Or, you could go with the number of metropolitan areas of over 50,000 population. That is 500. Those smaller cities might be lucky to have one real bookstore.

https://en.m.wikipedia.org/wiki/List...es_urban_areas

Either way, considering how bookstores are concentrated in big metro areas, Daunt is correct, the US is "underbookstored". As he sees it.

But that is because people are spread out all over: the US ranks 177th in population density at 100 people per square mile versus the UK he is familiar with, at 51, and 726.

That is because 85% of the population in the top metro areas (>1M) resides in the suburbs and exurbs, not the city centers. And then there's the other 450 metro areas and the smaller towns and cities.

So yes, if you have in the bigger coastal cities you probably have no shortage of B&M bookstores. Chicago, too.

But for most of "flyover country" full service bookstores are not abundant and *never* have been. There just aren't enough readers within reasonable driving time. That is why Amazon book sales grew so big so fast.

And, as noted above in the Wikipedia ABA listing, the number is steadily going down. B&M bookstores are not, as a whole, a particularly profitable business.

Among the non-chain stores, breaking even is a triumph.

I am taking exception to your statement "as always being rare".

When I think bookstore, for this discussion, I think a store who's primary business is selling new books. From the Google's I did, I don't think there were any (or few) outliers (art supply, news stands, airports). There were some used book stores. There were some college.

If you are only talking B&N than fine. But if you are talking historically, IMO, for my definition of bookstores, they are not just in/were in the biggest cities. I seem to recall driving through towns in the 70s and 80s, and many smaller cities had bookstores; they weren't the size of the modern B&N, but they were not boutiques and they sold new books, and you could order what they didn't carry. My town had a bookstore, and it wasn't even in the top 100 for population in our state.

In my state, 2 B&N stores are located in cities that don't even make the top 10 for population in my state (one is the 46th).

[rcentros]

Originally Posted by ZodWallop

But Daunt has already said he wants to scale down to smaller, more stores*, so this isn't that shocking.

*didn't he? I remember him saying that, but I may be confusing it with speculation here on MR

You remember correctly.

[rcentros]

Originally Posted by fjtorres

The bolded part was "too expensive", which brought up the matter of NYC rents because a lot of people are counting on B&N's new owners coming in with "deep pockets", to save Nook.

"Deep pockets" doesn't mean they aren't going to make changes. Moving to smaller stores was brought up as soon as the sale was announced. I thought the Nook might be on the way out, but recent announcements from the new CEO seem to counter that notion.

[MGlitch]

Originally Posted by rcentros

"Deep pockets" doesn't mean they aren't going to make changes. Moving to smaller stores was brought up as soon as the sale was announced. I thought the Nook might be on the way out, but recent announcements from the new CEO seem to counter that notion.

Agreed, deep pockets doesn't mean you don't sow up the holes that are causing you to lose money.

Good to see they're targeting some of the corporate office folks, not that I wish those folks ill, but there's bound to be some bloat in those offices that is negatively impacting BNs bottom line. Maybe Daunt will issue in an era where they don't just keep trimming from the store level staff and then wondering why fewer people can't keep doing the same job as it took more people to do.

[rcentros]

Originally Posted by John F

When I think bookstore, for this discussion, I think a store who's primary business is selling new books. From the Google's I did, I don't think there were any (or few) outliers (art supply, news stands, airports). There were some used book stores. There were some college.

If you are only talking B&N than fine. But if you are talking historically, IMO, for my definition of bookstores, they are not just in/were in the biggest cities. I seem to recall driving through towns in the 70s and 80s, and many smaller cities had bookstores; they weren't the size of the modern B&N, but they were not boutiques and they sold new books, and you could order what they didn't carry. My town had a bookstore, and it wasn't even in the top 100 for population in our state.

When I moved to Twin Falls, Idaho in the early 90s, there was a local book store downtown, a B. Dalton (or Waldenbooks?) in the mall, a Hastings (which also sold records and rented and sold videos, but the book section was the most prominent), and the "new" Barnes & Noble in one of the strip malls around the mall. The local bookstore went out of business shortly after the B&N came in. This town had a population of 28,000 in 1990, so it wasn't huge. I can't remember exactly when B. Dalton/Waldenbooks went out, but I think in the early 2000s. I think Hastings lasted until 2007/2008 recession (maybe longer). Now B&N is the only local choice in Twin Falls.

In the 80s almost every mall had either a Pickwick, B. Dalton or Waldenbooks (sometimes a Waldenbooks and a B. Dalton). Most towns I lived in also had local bookstores downtown.

[fjtorres]

Originally Posted by John F

I am taking exception to your statement "as always being rare".

.

Up to the 50's there were barely any books stores in the US.
Just a few hundred stores whose primary business was, as you say, selling new books.
Seriously.

https://www.mentalfloss.com/article/...americans-read

If paperbacks were going to succeed in America, they would need a new model. De Graff, for his part, was well acquainted with the economics of books. He knew that printing costs were high because volumes were low—an average hardcover print run of 10,000 might cost 40 cents per copy. With only 500 bookstores in the U.S., most located in major cities, low demand was baked into the equation.

Bookstores were unicorns until paperbacks came about in the late 30's but then the war stepped in and it wasn't until the economic boom of the 50's and 60's and the appearance of paperback originals in the late 50's that reading for entertainment hit the mainstream, promoting the creation of the mall chains of the 60's through 80's. Then the 90's hit, the publishers consolidated, mall chains were boughtbout and closed, and the big box stores took over. In less than a decade they went from 10,000 bookstores to around 5000.

The heydey of "a bookstore in every regional mall" was the 80's. It lasted maybe a decade and a half. The historical norm was really "very few stores, concentrated in the big cities".

Then Amazon stepped in, building its empire off sales to the very places *without* bookstores, building enough volume to qualify for the top publisher discounts. Half a decade later, Borders was gone. A half decade after that saw entire regional chains follow it and B&N begin a downward spiral.

It isn't ending. Non-chainstores were steadily closing a dozen a year or so ago and now the lockdowns froze sales but not costs.

Try this:
https://www.theguardian.com/books/20...s-disappearing

Like payphones, typewriter repair shops and middle-class housing, bookstores are a vanishing presence in New York City. In 1950, Manhattan had 386 bookstores, according to Gothamist; by 2015, the number was down to 106. Now, according to a count by the city’s best-known bookstore, the Strand, there are fewer than 80. Book Row, a stretch of Fourth Avenue between Union Square and Astor Place that once housed almost 50 used and antiquarian bookstores, now claims just one: Alabaster Bookshop at Fourth Avenue and 12th Street. (Plus the Strand, which relocated a block away in 1957.)

The NYC case is not unique.
San Francisco, LA, Chicago, St Louis, California in general have all seen bookstores squeezed out over the last year or so. It's typically high rents, declining traffic, online comoetition and (shhhh!) minimum wage hikes.

As the Guardian says, low margins can't support open market costs.
And those are issues for *all* booksellers, everywhere.
Not just NYC.