Borders is teetering on the edge of financial collapse and now the Wall Street Journal reports that Barnes & Noble, while not as bad off as its main competitor, is feeling some pain…and expecting more. B&N chairman Leonard Riggio wrote an internal memo that says, in part:
Never in all of the years I've been in business have I seen a worse outlook for the economy. And never in all my years as a bookseller have I seen a retail climate as poor as the one we are in. Nothing even close. […] Barnes & Noble, too, has suffered from this crisis, albeit not as severely as most retailers, and certainly not as much as other booksellers. As you know, our comparable store sales have declined for the first time in our history. As a result, we are bracing for a terrible holiday season, and expect the trend to continue well into 2009, and perhaps beyond.
WAH! They need to start an ad campaign–“escape with a book.” Seriously, what can you sell in tough economic times? The opportunity to escape reality.
I love borders.That really sucks. I got here all t he time. I go to B&N too. There are always people there buying stuff, especially if they have one of the coffee bars.
I think people may be surprised at the holiday season data. There have been waaaaay more people out in my area buying stuff since gas went down.
If those two books stores go under I will be sad.
All they had to do at their Burbank store was have ONE copy of their Jules Verne collection of novels for me and they would have fared well for the year.
I wonder if a collapse of either of those two giants could lead to the return of neighborhood independent book stores.
This might not be a popular comment, but remember in the ’80’s when food prices and retail prices just kept rising and rising? And what was the result: the triumph of Wal-Mart because they kept cutting costs. So is this happening in the Book Store World?
It might be. Book prices have risen horribly over the last two decades, so this may be the reason book stores are hurting. If a discount bookstore chain arose, charging $3.00 for paperbacks, would it corner the market? If the next Stephan King novel sold for $8.00 hardcover, would it be a runaway bestseller, selling five times as many copies as he usually does?
The statistic that counts is, how much more are the public libraries being used, due to high book prices? In Guelph, Ontario, Canada, use of the public library is up over 40% over the last five years, and now they are expanding the size and the number of their locations. Why buy a hardcover fiction book for $25.00 when you can borrow it for free?
POD bookstores might be one attempt at using technology to bring down book prices in an effort to sell more books and get more people buying rather than borrowing. Otherwise, publishers might price themselves right out of the market.
I don’t think Barnes & Noble is going to collapse any time soon, as Riggio notes in his memo. But Borders is teetering…it has been for a while now.
Lee
He went on to say, “Never in all of the years I’ve been in business have I failed to consider Amazon.com my worst enemy. I always considered Borders the competition. Turns out they were just a weaker and more obtuse form of us.”
You’ll note in the Journal piece that B&N still plans to pay its shareholders a $50 million dividend this year. Companies on the brink of dissolution don’t pay dividends.
I doubt they’ll be going anywhere anytime soon.
B&N are trying to keep up appearances while they refuse to pay the publishers of the books they sell. That might be one way to make a short term profit, but that is like tossing your oars out of your canoe to make it go faster.