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Section A: General News


Editorial: B&N is here to stay




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May 21, 2014 | 2,275 views | Post a comment

Barnes & Noble CEO Michael P. Huseby responds here to “Barnes & Noble: Will it be gone by New Year’s?” May 7.

If you’re in business -- no matter what business -- you know that having to listen to the odd Henny Penny is an occupational hazard. You remember Henny Penny, the children’s storybook character who felt an acorn drop on its head and believed the sky was falling. The folk tale has become the seminal example of a hysterical, uninformed, and mistaken belief that disaster is imminent.

Recently, some Henny Pennys have begun clucking about the future of bookstores. The rise of digital content, online selling, and broader retail distribution, they say, will kill bookstores. Why, they ask, will people go to a bookstore when they can buy books online or at department stores?

Feeding the hysteria are the bankruptcy two years ago of Borders, the national bookstore chain, and recent speculation that Barnes & Noble will accelerate its bookstore closings in coming years. Some have even suggested the demise of B&N is so imminent that gift cards should be used immediately upon receiving them because the company’s financial foundations are shaky.

To paraphrase one of our nation’s great writers, Mark Twain, the reports of bookstores’ death have been greatly exaggerated. Here are the facts:

Barnes & Noble has not adjusted its plan for store closings. Historically, we have closed about 15 stores a year for the past 10 years. Of that number, some of the stores were closed because they were unprofitable, while others were relocations to better properties. Barnes & Noble has great real estate in prime locations and the company’s new management team is fully committed to the retail concept for the long term.

Why are we so committed? There are several reasons, all focused on delighting our customers. No other retailer can match the selection of books available at every Barnes & Noble location, supported by award-winning customer service. Just look at the success of last holiday season to see if we are getting it right.

Our financial foundation is solid, and we have a strong balance sheet. Barnes & Noble ended the most recent quarter with $490 million in cash, $276 million higher than the prior year, with no draw on its $1 billion credit facility.

As for the threat of the digital revolution, Barnes & Noble has one of the industry’s leading E-commerce sites in BN.com, as well as world-class fulfillment centers. In fact, Barnes & Noble can offer something online-only competitors cannot -- a unique in-store experience that allows our customers to interact with knowledgeable booksellers who provide exceptional customer service.

We also have one of the best e-readers on the market -- the NOOK. Given the competitive landscape, we are extremely proud of all we have accomplished with the NOOK business. In fact, while we may not be a consumer electronics retailer, we have sold more than 10 million NOOK devices because we offer a great reading experience, unmatched content, and we have an army of booksellers supporting them.

Behind these offerings are our strong partnerships with industry leaders like Microsoft and Pearson. They say you can judge someone by the company they keep -- and we keep some pretty good company.

Moreover, we have strong relationships with our publishing partners and our prices are competitive with any other outlet selling books. Plus our stores offer a broad range and deep selection of books, including not only bestsellers but also the backlist. The upshot: Publishers want to work with Barnes & Noble because we understand and support the business.

Here’s the kicker that no Henny Penny wants to hear. People are actually coming back to bookstores more often than they have in years. Improving bookstores sales trends during fiscal 2014 indicate that customers are reigniting their love affair with physical books. This trend supports industry reports that suggest eBook growth has moderated and was essentially flat in 2013.

As this trend continues, we believe we are well positioned to delight our customers on whatever platform they choose to connect with us -- in our stores and online, and digitally on our NOOK platform. And we back it up with more than 40,000 knowledgeable booksellers across the country ready to recommend every customer’s next great read.

We have openly acknowledged the challenges within our business and the industry and are adapting to the changing business. But, the next time Henny Pennys suggest that the sky is falling on bookstores, don’t take their word for it. Step into your local Barnes & Noble store and enjoy the extraordinary experience that delights millions of our customers every day and has made us one of the most beloved brands in the country.

Michael Huseby is the

Chief Executive Officer of Barnes & Noble, Inc.
 

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