Archive for barnes and noble
Barnes and Noble is seeking to retool the Nook division and to stem the tide of declining revenue. The company has lost over a billion dollars since they first unveiled the Nook e-Reader back in 2011. They are hoping to solve the situation by firing a large percentage of their workforce, capitalizing on digital sales and releasing a new tablet.
Since fiscal 2014 began, approximately 190 NOOK positions have been eliminated both through reductions and attrition. The bookseller has spent over $2.4 million dollars on severance packages, but should save money in the long-term. Most of these positions were in the hardware and programming departments. Currently, even with these reductions Nook has 500 people currently working in that division. Likely, further layoffs are anticipated to happen during the year.
Last quarter Barnes and Noble sold $50 million dollars worth of digital content, which incorporates apps, books, magazines and videos. In the US, the bookseller controls roughly about 20% of the eBook market, whereas a year ago they had 27%. The bookseller is hoping to capitalize on more international distribution via Microsoft to boost revenue. This is a good model, because it is not reliant on internal staff to promote and market the Nook Reading app for Microsoft, the Redmond company is doing a fine job at hyping it.
Finally, Barnes and Noble announced plans for a new Nook tablet to be released sometime this year. If we look at past trends, it will likely come out in October, to gear up promotional efforts both online and in the retail stores for the pivotal holiday season. Nothing is really known about the tablet yet, but there are rumors that the company will be dealing with Foxconn to manufacture the devices and their California R&D division will handle the design.
Barnes and Noble is a company in transition, when it comes to their floundering Nook Media division. In the last two months they have announced the departures of Jim Hilt – Vice President of eBooks, digital products director Jamie Iannone and VP of digital products Bill Saperstein. A myriad of other people have left, including the head of accessories and most of the hardware developers. The big reason these executives have left is primarily due to the fact that Nook Media has lost over a billion dollars since 2010.
Barnes and Noble is quite transparent when it comes to their financial earnings and hold nothing back from investor calls and their reporting. Normally, their end of the year reports come out every April and there is some bleak news. In 2011 the company lost 209 million, in 2012 they lost 261 million and in 2013 they increased the losses to 475 million. If we look at the quarter ending on July 27, 2013 they reported loses of 55 million and October 26, 2013 NOOK lost 45 million. If you add all of these figures together it comes to over 1 billion dollars.
It is painfully obvious that Barnes and Noble was making too many units and not selling enough. This resulted in dramatic price drops just to move the inventory. The executives are firmly to blame with none of their e-readers sold nearly as much as the Nook Color, their first tablet and their first/second generation e-ink display with a color LCD on the bottom.
Amazon, Apple and Kobo all got involved in the e-reader and tablet space roughly around the same time Barnes and Noble first started making devices. All of these companies are extreamly profitable and rarely have a quarter in which they are in the red. Why? They poach executives away from rivals, and have great leadership. This is evident in the products they release and the marketing they put into it. Can you ever say you saw a sexy Barnes and Noble television commercial?
I have no idea how a company can lose over a billion dollars and still be in business. It makes 0 sense with the largest bookstore in the USA to serve as a retail showcase can be in this much trouble. Obviously, there are plenty of ideas on how to turn things around, instead Barnes and Noble appoints the VP of Marketing Doug Carlson to lead the eBook crew. Here is an idea, hire from the outside, to bring fresh new ideas. A herd of spitting camels, is still a herd of spitting camels, no matter who the alpha of the group is.
Barnes and Noble has received a viable offer to buy their entire bookstore business from G Asset Management. They have proposed a complete buyout at a deal valued at $672 million. If they are unable to go through on this deal, their secondary offer is to buy a 51% stake in Nook Media.
There are plenty of barriers in place to prevent the sale of the last major bookstore in the USA. Len Riggio, chairman of B&N wanted to take the company private and was willing to pay big money to do it. The threat of shareholder lawsuits put the kibosh on his plans.
G Asset Management has had their sights on Barnes and Noble for quite awhile. They originally wanted to buy the College Bookstore division in 2012, and has been vocal at splitting Nook away from Barnes and Noble.
Barnes and Noble is a bookstore on the decline. The stores are profitable but Nook Media has been bleeding month for over a year. This prompted the exodus of all senior executives in charge of Nook. The head of eBooks, the head of hardware and head of accessories have all left the company and a new CEO has taken the helm. Interesting enough, the current CEO comes from a financial background, which makes the likelihood of a sale more realistic now, than under the previous regime.
What are the current barriers to sell the company? It is thought that Len Riggio controls 45% of the company and he would have to OK the deal in order for it go though. The Asset Management company also does not actually have the money to buy Barnes and Noble, instead they would have to raise it themselves.
Barnes and Noble has fired most of their hardware engineering division last Thursday, according to one source. This follows Barnes & Noble dismissing the VP of Hardware, Bill Saperstein in January. The head of Nook Accessories, Jacqueline Corso, was also let go last week. It looks like B&N is initiating the Clean Sweep protocol, as new CEO Michael Huseby is likely appointing his own cabinet into the upper echelons of management.
The Barnes and Noble portfolio of e-Readers and Tablets have seen cumitive loses each financial quarter in 2013. The entire hardware division was down 32.2% on a year-over-year basis. Most of the Nook management team mentioned that the bookstore chain should just axe it. One of the last proclamations that former CEO William Lynch made, was that the company was getting out of hardware, only to flip flop and say they were going to continue to make e-readers.
Barnes and Noble is expanding on their Nook Study platform and the entire program is undergoing a revision. They have brought over Roger Bishoff, formerly of Microsoft, into the role of Engineering Manager. He will be spearheading the entire digital Nook Education endeavor. Likely, the College and University bookstore chain of B&N will promote the digital aspect as early as the Fall.
Many of the new hires for B&N educational unit are actually based in the Seattle area. They are actively seeking new candidates to work in Redmond, which is a firm indication that Microsoft might be playing a role in this whole program.
The vast majority of Barnes and Nobles programs are in serious jeopardy. Their App market has been relegated into obscurity with the inclusion of Google Play and their self-publishing platform, Nook Press has not made any announcements since it originally launched last year.
Critics and industry speculators have been saying the same thing for far too long: Barnes and Noble is in trouble. And with the announcement that its third executive in the Nook division has left the company–most recently Jim Hilt, head of global ebook sales, and before him digital products director Jamie Iannone and VP of digital products Bill Saperstein–coupled with the disappointing holiday season sales and announcements of store closings, it’s easy to see why the rumors gain steam.
Following assurances to Good e-Reader from VP Theresa Horner only last October that B&N is fully committed to the Nook division, the company unveiled a brand-new dedicated e-reader. And certainly doing a year-on-year comparison of the 2013 holiday shopping season is a little unfair when taken into account that 2012 saw two brand-new Nook tablets roll out just in time for Christmas. But without plans at this time to replace these lost digital leadership positions at B&N, is the Nook division without direction?
Statements from within the company have promised once again the Barnes and Noble is committed to the Nook division and will be aggressively driving growth. The international rollout is taking longer than anticipated, with Nook still focused in the US, UK, and now Australia (some additional global markets can access the Nook ebook store through specific tablet apps, however), but at a time when there’s a high rate of turnover within the digital division, maintaining a slow but steady pace of international growth may be the smarter move to take.
Update: Mary Ellen Keating of Barnes and Noble released the following statement. “I can confirm that Bill Saperstein is no longer with the Company. Bill was instrumental in helping us develop our successful brand of NOOK devices. We thank him for his many contributions and wish him well in the future. We believe we have a strong management team in place at NOOK having recruited significant new talent, including Mahesh Veerina, Chief Operating Officer of NOOK Media. The new NOOK management team is focused on managing the business efficiently so that it becomes financially strong while at the same time aggressively moving to drive revenue growth.”
She went on to say “Jim Hilt will be leaving the Company sometime in February. We want to thank Jim for his contributions to the eBook business. With respect to digital content, this team is being led by Doug Carlson, EVP of Digital Content and Marketing. We have no additional personnel announcements at this time.”
The eBook market has blossomed over the course of the last four years. In the United States nearly 8.5 million adults, 18% of the population, have bought at least one e-book. There are hundreds of bookstores that sell electronic books online, some are very niche specific and others sell everything under the sun. Good e-Reader Research is reporting today that Amazon and Kobo are basically tied as being the online bookstore of choice for hardcore readers.
Good e-Reader conducted a one month research project where we polled 250 people about their favorite online bookstore of choice. Good e-Reader users tend to be savvy, well educated and not afraid of new technologies. These are basically the hardcore users that often buy 50-100 books a year and often have more than one e-reader in the household.
Amazon and Kobo were tied with 35.34% of the overall votes and these two stores have the largest international footprint. They exist in over 30 different countries and offer millions of titles. Kobo has a much larger library of titles, with over 3.6 million available, they are also easier for people to buy books from. One of the advantages these two companies have is their extensive portfolio of e-readers and tablets to facilitate reading. The Kindle Fire and Kobo Arc line of Android devices are perfect for reading newspapers, magazines, comics, kids, cookbooks and content that shines in living color. Hardcore Fiction and Non-Fiction readers tend to gravitate more towards the Kindle Paperwhite and Kobo Aura.
It is no surprise that Kobo and Amazon are basically tied, as they do offer the more extensive library of content, whether you are using one of their devices or install the app on your iPad.
Barnes and Noble might be seeing a 30% decline on their hardware and eBook sales during the past holiday season, but they they do have user loyalty. 10.04% of our readers prefer to buy their Nook Books, but 99% of the participants originated from the US. This is the core market where the Nations largest bookseller sells tablets and e ink readers in hundreds of retail locations. Their ecosystem is fairly well developed and they offer self-published titles under the Nook Press banner and full color content optimized for the Nook HD. The sole new device of 2013 was the Nook Glowlight, which tends to be your best friend for binge reading.
The Nook hardware is basically only relevant in the US and UK, but their ecosystem has expanded recently. If you are a Windows 8 tablet owner or like to read on your computer, Microsoft has aided the international expansion into over 32 different countries over the last year. Sadly, Android and iOS readers have to be based in the US/UK to buy books online.
Most other bookstores only had a few people claiming to use it on a regular basis. Sony had 6.02% of the vote, Google with 4.42%, Smashwords at 2.41% and Wattpad with 2.01%. There were 11 people, that made up 4.42% of the vote that mentioned iBooks, the library, Bookeen and others.
Following information that a Securities and Exchange Commission investigation is underway against Barnes and Noble for alleged inconsistencies in reporting losses, the lawyers have rushed in to claim a piece of any money that might be doled out.
According to a filing by one of the numerous firms to file, Ryan & Manisaks, LLP, ” The complaint alleges that during the Class Period, Barnes & Noble issued materially false and misleading statements regarding the Company’s financial performance and future business prospects. Specifically, the complaint alleges that defendants misrepresented or failed to disclose: (1) Barnes & Noble’s Nook e-book reader sales had dramatically declined; (2) the Company would shutter its Nook manufacturing operations altogether; (3) the carrying value of the Nook assets were impaired by millions of dollars; (4) the carrying value of the Nook inventory was overstated by $133 million; (5) the Company was expecting fiscal 2014 retail losses in the high single digits; (6) Barnes & Noble had over-accrued certain accounts receivables; (7) Barnes & Noble was unable to provide timely audited financial results for fiscal 2013; and (8) the Company might be forced to restate its previously reported financial results.
“The complaint further alleges that following the July 8, 2013 resignation of Barnes & Noble’s Chief Executive Officer and a July 29, 2013 earnings restatement, on August 20, 2013, Barnes & Noble disclosed much worse company-wide financial results for its first quarter 2014 than the market had been led to expect, including lower sales and losses that more than doubled from the first quarter of 2013. Barnes & Noble also disclosed that the Company’s Chairman had placed on hold his previous bid to take the Company’s bookstore business private. On this news, the Company’s stock price fell more than $2 per share, or approximately 12%.”
Unlike suits brought about on behalf of consumers–such as the lawsuit brought against Apple and five of the then-Big Six publishers for artificially overcharging customers for ebooks–this one is focused on the people who bought stock in Barnes and Noble based on information that the SEC now feels might have been false.
One of the more interesting retail histories in the book industry is that of Barnes and Noble (the history of the stores and the brand can be found HERE), with a number of locations having significant importance both as thriving retail spaces and as icons within the company. Sadly, the flagship 5th Avenue store, bought when Leonard Riggio, founder of the Student Book Exchange in 1965 and reviver of the then-flailing B&N brand, permanently closed its doors late yesterday.
While the news may have come as a surprise to customers or passersby, B&N announced in 2013 that it would be closing a number of stores over the course of this year. Despite its famous status within the company, the 5th Avenue location had transformed in recent years into one of B&N’s college bookstores, focusing primarily on textbooks and trade books. The location made it ripe for closure too, as it is only a few blocks from the very well-known and highly trafficked Union Square Barnes and Noble location.
Barnes and Noble still operates a strong college textbook selling presence, but as B&N pointed out in relation to this particular store closing, most college students buy their textbooks on campus; B&N actually operates a number of campus bookstores for that reason. Those who opt to shop online for course materials often end up at B&N’s online textbook store.
While this may be a wistful loss and certainly the fifty-six employees of the location will hopefully fare well, it is a move that makes sense for the company, given the location and the demographic of its customer base.
Barnes and Noble and Books-A-Million have confirmed to Good e-Reader that they have stopped carrying single issues of Marvel Comics. You might still find single issues at some of the smaller stores or in more rural areas, but it has been mandated that stores cannot order new issues.
Barnes and Noble has a flagship store in Union Square, in New York City. This is the location where they tend to have unveiling events for the Nook product line. Two sources at this store have confirmed that they will no longer sell single issue Marvel Comics. An official Barnes and Noble spokesman has also confirmed that they will continue to sell graphic novels and trade paperback editions of Marvel properties, because they are sourced through Hachette. Customers will still be able to purchase single issues produced by DC and Dark Horse.
Books-A-Million has also confirmed that they are no longer carrying Marvel titles at the head office. Contacts within the receiving and ordering departments have said that Marvel titles are simply not available on their lists anymore. They are basically unable to order single issues comics at all.
It is very interesting that exactly at the same time BOM and B&N both have stopped carrying single issues of Marvel Comics. This decision is not from the bookstores themselves, but has come directly from Marvel. The big question is why? I can’t remember a time when the entire Marvel universe was more popular than it is now. Perhaps this could have something to do with Marvel developing their own digital distribution platform and intend to phase out Comixology.
When it comes down to it, many comic lovers tend to buy their single issues directly from dedicated comic stores and not your average bookstore. Your local comic shop often has a wider selection and a copious amount of back issues. Barnes and Noble, and many other bookstores often have an elevated rate of comic returns to the publisher every month and likely Marvel said “enough is enough.”
Marvel has not responded to many requests for an interview or to give us a definitive reason why they have suspended single issue comics across the entire retail trade.
Barnes and Noble has just released their 3rd quarter financial results and things are not looking good. The company has seen a decline of 41.3% in Nook e-Reader, Tablet and Accessory sales and the entire division only brought in $51 million dollars. eBook sales were also down 21.2% due to the lower average selling prices of books and total sales were $57 million.
Part of the reason Barnes and Noble is seeing huge declines with their hardware is because of the price slashing. If you look at their portfolio of tablets last year they were making 20% to 30% more on each device sale. In Q2 ’13 the NOOK device prices were $99 for the Nook Simple Touch, $139 Nook Simple Touch with Glowlight, $199 for the NOOK Color, and $249 for the NOOK Tablet. Those were some very solid profit margins, but if you look at the prices this year you can get a Nook Simple Touch for $79, which is a 20% loss. Or you can purchase a Nook Simple Touch with Glowlight for $119 at a 15% loss, or a Nook HD $129 -35% loss or finally the Nook HD+ for $149, -40% loss.
As you can see, Barnes and Noble is trying to remain competitive in the hardware sector but it is no surprise that their sales are significantly down. They are trying to still make a go out of selling Nook devices in the hope that digital book sales will make up for the diminishing returns.
If you look at the recent decline in eBook sales, this is partly attributed to the abolishment of the Agency price model of selling books. For the longest time book retailers could charge what they wanted for eBooks and then Apple and the six major publishers came together to even the landscape and charge a unified pricing model for books. Needless to say after about a year in court this pricing model was axed and all contracts had to be renegotiated. This is a win for customers, but B&N is now making a few dollars less for each digital book sold.
eBook prices are one thing, but we have not seen any runaway success stories this year that have been getting people out in droves to buy it. 50 Shades of Grey and the Hunger Games have been critical success stories and those 2 trilogies comprise of the highest grossing eBooks of all time. The lack of 2013 bestseller to capture everyone’s imagination is also a big part of the decline.