Although Barnes & Noble’s cost cutting efforts have enabled the brand to cut year-over-year Q3 net losses nearly in half, from $39.2 million to $20.4 million, the bookstore still is having difficulty bringing people into its stores.
In its Q3 earnings report, Barnes & Noble indicated:
Sales decreased 4% to $858 million;
Comparable store sales declined 3.2% due to lower store traffic;
Nook eBook sales with included digital content, devices and accessories declined 19.4% to $35 million; and
Full-year comparable store sales are expected to decrease in the “low single digits.”
Perhaps most alarming about the results is that the company indicated comparable store sales would have been even worse, except for the release of one of its hottest-selling items — the screenplay for Harry Potter and the Cursed Child.
Despite the retailer’s struggling sales in recent years amid Amazon’s surge, Barnes & Noble Chairman and CEO Len Riggio placed blame for poor sales on the election year. While the election certainly did take its fair share of money out of retailers’ pockets, there isn’t much to indicate that the contest hit Barnes & Noble’s any harder than it did other retailers. In its latest move to try putting a dent in Amazon and bring a smidgen of success to its Nook business, the bookstore is selling a $50 Nook tablet online as part of its Black Friday sale.
Former Staples Exec Takes Reins As COO
Prior to releasing its Q3 results, Barnes & Noble unveiled the hiring of new Chief Operating Officer Demos Parneros, who will report to — and work with — Riggio on all aspects of the company’s operations, including stores, merchandising, e-Commerce, systems and real estate. Parneros joins Barnes & Noble from Staples, where he worked for three decades before resigning as the company’s President of North American Stores and Online in March.
The addition of Parneros brings Barnes & Noble a C-level executive with plenty of experience, but it does raise questions around where the company’s next strategic move lies. Staples has been in a very similar position to Barnes & Noble as a category leader in its own vertical — one that lost much of its sales to online competition and has struggled to bring consumers back to its e-Commerce site. With that said, Parneros will have to learn from his former company’s missteps if Barnes & Noble plans on having success repositioning going forward.
Jaime Carey served as Barnes & Noble’s Chief Operating Officer before shifting into the post of President of Development of its recently created restaurant group in June.