Tag Archives: Barnes and Noble

The Bookseller’s Bell of Doom Rings For Barnes and Noble in Santa Monica, CA

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Huge Rent Increase Forces Flagship Store to Close Its Doors

by Paul Hunt

 

Dateline: January 11, 2018

Today was the sad ending for the beautiful Barnes and Noble book store in Santa Monica.  At the end of a 20 year lease, they faced a large rent increase that made the profitability of the store impossible,  Everyone has heard of the expression “Greedy Landlords”.  In many areas, the wonder is that there is any room left for ever more rent increases before the commercial and retail locations just shut down.  The rent-increase euphoria that has seized the corporate real estate world is mind-boggling.  They must be led by younger folks, with no past memory.

Midnight Special

There are many factors driving this insanity.  Remember the old Midnight Special book store on the Prominade?  The store was a leftist carnival, a literary beacon for the Progressives.  The building was owned by an old guy who was, let’s say, beyond “progressive”.  He kept the rent down and let the store flourish.  I don’t remember any store quite like it, and if you dug politics you were in socialist paradise.  Then the old ownier died or went into a long-term care facility.  The owner’s “kids” (not so young as the owner was in his 90s as I remember), got an offer they couldn’t refuse.  A major clothing company offered to pay around $45,000 per month rent.  The Midnight Special was paying about $5,000 at the time, so  guess what happened?  The “kids” got a windfall.  The progressives got the capitalist boot.  The kicker is that the clothing company, Levis, did not look at it as a retail store.  They considered it as a “billboard”, a place to showcase their jeans.  Compared to a two-minute television commercial in the Los Angeles market, the retail space is cheap, even at the outrageious price they are paying. So how can any bookstore compete with that?

Here is a blast from the past, an old timer shouting out to the current real estate corporations.  I am probably not the only one who remembers the Third Street Prominade in the 1980s.  Most of the stores were empty or filled with third rate shops, none special or exciting.  The Prominade was dead.  It was packed with homeless people.  It was a little scary, with a lot of crime. Think it can’t happen again?

Bad Times in San Jose

The bad times are forgotten by the next generation, especially if they didn’t have to live through them as adults.  Back in the 1960’s there was a terrible recession in California.  I had a sales job that took me around the State.  L.A. was “economic bad,” but when I got into San Jose, I was floored.  Miles of businesses were gone, hundreds of them empty, closed down.  Supermarkets gone, huge shopping malls gone, car dealers gone.  Miles of recession devestation, an economic disaster. Driving down the main drag was like driving into the end of a Zombie movie.   So be advised, it can and might happen here.

The Barnes and Noble store in Santa Monica was a beautiful bookstore.  It had three levels, elevators, escalators, great lighting, and a stunning design.  The event room on the second level was the best I have seen in a book store, a mini-auditorium where many great authors came to discuss their works and sign books.  We filmed there on occassion.

In other articles on BookStoreMemories, we have covered some of the issues that have impacted B & N:  the online monopoly amazon.com being the main culprit, the destroyer of bookstores.  But  B & N has itself made many past mistakes that go into the mix. We are nevertheless sad to see Barnes and Noble close their Santa Monica store, it was a wonderful store and a great place to shop.   There is now a literary hole in the soul of Santa Monica.

Video Tour of Barnes & Noble Booksellers on the last day, Click Below:

 

Wall Street Site Questions Barnes & Noble

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B & N Revenue Plunges From 6.75 Billion to 3.89 Billion Yet Still Paying An 8% Dividend – Big Shareholders Suckiing Out $$$$ ?

Seeking Alpha, a critical wall street and financial website, has questioned Barnes and Noble’s continuous dividend payout yielding 8%, asking if this is sustainable during recent huge drops in revenue.  Read the entire article, CLICK HERE.

Some comments on Barnes and Noble and Amazon for historiical background as follows (not part of the Seeking Alpha article):

B & N in past years made more bottom line money on the game business they purchased. The game sector, which was around 10% of revenue threw off about 90% of the profit. This has changed, but shows that their costs of selling books was always higher than the thousands of independent booksellers that they muscled out of business with the superstore fad. They failed to exploit their lead in the game business, which is now mainly online. They also failed years ago to play fair with the used book market when they had a chance to make a great deal with a company called abebooks. So guess who finally swooped in to buy abebooks? You guessed it, amazon, which now has a basic monopoly on online used book sales. B & N’s partnership with European giants in barnesandnoble.com also went south with huge losses until they were forced to buy out their Euro partners. 20 years of bad decisions has led to this moment. Is the high dividend just the mechanizim for big shareholders to suck the carcass dry?

Pickwick to B. Dalton to Barnes & Noble to Gone Forever.

Nobody wants to look under the hood of the B & N engine, where you would find that the 8 cylinder engine is down to 4. For instance, in Southern California, they have closed many of their best store locations. Gone is B & N from Pasadena in the Old Town District, gone is B & N from the Encino area of Ventura Blvd. And don’t forget the huge loss they got when they bought B. Dalton books, which operated 798 stores in malls across America. Their mis-management closed all of them, including the big Hollywood Boulevard Store that was called Pickwick Bookshop that B. Dalton had bought. How soon you all forget the decades of bad management, probably over 1,000 stores closed, the thousands of employees laid off, the financial losses to shareholders, the mess with the European media giants in BarnesandNoble.com. The question is really: Was B & N a stock fraud for the last 20 years, or just the worst management ever seen?

Barnes and Noble does a lot of things right. They have great selection. They have a nice clean website. They have a lot going for them with Nook, self-publishing, and many other strategies. They have nice Starbucks cafes, wi-fi, and good locations. So how can they improve and survive? Various articles point out the disaster from bad upper level management. Add to the list the recent dumb idea of in-store beer and wine restaurants.

They can turn some things around by having more in-store celebrity author events, use video marketing on social media, live stream the events from their stores with easy ordering from home couch potatoes, and everything to get folks into the stores where impulse buys will help the bottom line. For the stay at home crowd, they should compete with amazon by selling used, rare and out of print books. They did this at one time, with thousands of great vendors who dropped shipped. The program could be re-started to compete with amazon. It went away due only to bad management at the top level. Amazon has a lot of flaws and weakness in the way they treat their vendors. By being fair, B & N could lure many thousands of them away from amazon and add a huge income stream. Forget the beer, go with the books.

Amazon, which has a monopoly on used book sales in the U.S. and a stranglehold on new book sales, continues to erode sales at Barnes and Noble. Even President Trump has recently commented on amazon’s more than cozy deal with the U.S. Postal Service.  What he failed to mention was not only does amazon get special postage rate deals, but it also has the post office delivering mail on Sundays in selected cities.  This has got to be a loser for the Post Office, it totally obliterates the economy of scale needed for sustainability.  What is interesting is to go way back in the history timeline to the 1950s.  The Post Office delivered mail twice a day during the week in Los Angeles, and I assume, most other cities.  What happened to that?  We always think our civilisation as getting better every year, when the truth is far different.  Not only has the Post Office deteriorated, closed thousands of offices, etc., but now they seem to be tied into a losing deal with the amazon monopoly.

Let’s hope tha 2018 will bring some sanity back to the world. It’s just my opinion, but: Amazon is a monopoly and should be broken up.  Google should be seized by the U.S. Government and the search engine made a national public utility.  Barnes and Noble needs to get its act together, it has opportunities and possibilities, but the prognosis for them is somewhat grim.  Happy New Year everyone!

What do you think?  Bookseller and Book Lover comments welcome!

Update January 4th, 2018.   Barnes & Noble, Inc. (NYSE: BKS) today reported that total holiday sales for the nine-week holiday period ending December 30, 2017 as declining 6.4%.  Comparable prior year store sales also declined 6.4% and online sales dropped 4.5%.  The stock price tanked to $6.50 per share.  A grim picture indeed.  The question now becomes can Barnes & Noble survive at all?  Is there even any time left for a new management turn-around plan?

 

 

The Barnes and Noble Censorship Two-Step Dance To Oblivion Starring Milo Yiannopoulos

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The Big Book Chain’s Self-Defeating Censorship Throws Huge Chunks of Cash to Their Dreaded Enemy amazon.com

by Paul Hunt

Sometimes you just have to shake your head in disbelief and wonder just how stupid some of the executives at big corporations can be?.  How did these morons ever rise to their positions?  Why do executive boards continue to pick guys to run a book company who have no experience in the book business?  More importantly, why hire a CEO who has no understanding of the field the company is in?

Barnes and Noble has had a series of mis-steps in the last couple of years.  The previous CEO decided that what was needed was for the bookseller to open up restaurants and bars inside their stores. They thought it would be nice to have folks sipping wine and browsing through the stacks.  A bad idea if there ever was one.  The stores are big on children’s books and young adult books, the last thing they need is a bunch of drunks or tipsy fobs populating the aisles.  They have opened several “test” locations but I think that idea will be a wash out.  The executives behind that bold move were canned and a new crowd brought in.  Things have gotten worse.

The flamboyant Milo Yiannopoulos has a new book out, called Dangerous.  Say what you want about this ever fascinating, outrageous self-promoting and offensive author, but he is a popular guy in some quarters. He was so controversial that a big gang of thugs did major damage to U.C. Berkeley do keep him from speaking.  The home of the Free Speech Movement.  Yeah, right.  No more “free speech” in that neighborhood. Enter the big bookseller Barnes and Noble.  Not to be outdone by the Berkeley street gangs, they have refused to stock Milo’s new book “Dangerous”.  This move of censorship opens a big area of discussion, and disgust with B & N.

How many times have we been down this road?  How many Henry Millers have caused crushing censorship?  How many displays in public libraries across the land to make controversial material available?  How many headline-grabbing legal battles?  How many years has the American Bookseller’s Association put on their famous “Banned Book Week” promo?  Booksellers know why.  It’s in our basic bookselling genes to have available the many different ideas of our culture and in fact all political and cultural ideas put out in books.  So B & N won’t stock the book “Dangerous”  They will “order” it for you, but not actually have it on their shelves. This is the big achievement of the new regime at B & N, censorship by refusing to stock a controversial book, in this case, a book called “Dangerous”.

The word in Wall Street circles is that B & N may be up for sale.  Maybe one of the reasons is that they don’t have anyone leading the company who knows a damned thing about selling books, or the ethics of bookselling, or why booksellers and libraries should have books that are not necessarily “popular”.  So who is reaping the benefits of this lunacy?  Amazon, of course.  “Dangerous” has sold over 100,000 copies online, and is a best seller in many parts of the book world.  The cash is flowing into amazon.com coffers.  Does B & N somehow think that people are going to flood into their stores because they are NOT stocking “Dangerous” ?

Meanwhile, that wild and crazy guy Milo, is putting on one of the best promo campaigns you will ever see.  TV appearances, street guerrilla theater in front of the other sad sack in this case, Simon And Schuster publishers, who pulled out of the book deal with Milo and is now being sued, has lost face, and has lost a small fortune.  Simon and Schuster, now owned by CBS, which also owns Pocket Books, Scribner’s Sons and Athenium, seems to have caught the censorship disease first, even before B & N. The drama goes on every day, with Milo on Facebook, Milo in the News, Milo taking shots at B & N for not stocking the book, Milo dancing in the streets of New York with his followers. Sales of his book get better and bigger.

All of a sudden, the financial analysts and bean counters are trying to figure out if B & N stock is worth more than eight bucks a share.  And oh, BTW, amazon.com is selling for over $1,000 per share. Looks like another brick and mortar headed for boot hill, in this case helped along by their own insane doings.