
Barnes & Noble Set To Be Sold To Elliott Management For About $683M - selimthegrim
https://www.npr.org/2019/06/07/730638739/barnes-noble-set-to-be-sold-to-elliott-management-for-about-683-million
======
legitster
So, before we doom and gloom about B&N, it's important to remember that
independent bookstores are doing great! [https://hbswk.hbs.edu/item/why-
independent-bookstores-haved-...](https://hbswk.hbs.edu/item/why-independent-
bookstores-haved-thrived-in-spite-of-amazon-com)

So why is Barnes and Nobles struggling? A couple of important points:

Their inventory and footprint IS HUGE. Large inventory with low turnover is a
margin-killer in retail. And I doubt they make much money off the books in
their shelves - real money is in the piled selection and special coffee table
books and new features and what have you.

Wide inventory is their advantage over the smaller stores, but it comes at a
huge cost and forces them to keep prices high. Remember, in retail, selection
_costs money_ consumers have to pay. Smaller stores can get away with a random
selection and stacking books all over the place (the hunt is part of the
experience). If someone can't find a copy of the Republic at B&N, they
probably lost a customer.

I suspect they will switch over to a more curated model (like AmazonBooks) -
basically only new and select books. Smaller store, less footprint, and less
product to buy and eat costs on. And then they can compete on costs more.

~~~
PopeDotNinja
Crazy idea in alternate universe... Turn all Barnes & Nobles into libraries.

~~~
war1025
Actual idea: Treat your local bookstore like a library. They don't care if you
read their books as long as you stay in store and are respectful. Plus they
have actual up to date selection with no waiting list for new releases. And
spending money at the cafe is probably higher margin for them anyway.

~~~
jhbadger
That used to be more of a thing in the 1990s. The big chains used to have lots
of seating, even sofas, and as a fast reader who can read a typical 300 page
book in a couple of hours, I used to spend most of my weekends reading books
for free in big bookstores. They've wised up. There isn't a lot of seating
these days.

~~~
winningcontinue
Ya, on my reading for english classes I'd do that for my reading assignments.
For my engineering and programming classes, i'd take copious notes. It was
entirely wonderful. I'd stay at the store from open till close and enjoy all
those hours.

------
tnorthcutt
Last year I wanted to buy _Thinking in Bets_ (great book, btw). I was feeling
impatient, so I looked it up on Barnes and Noble's website, and saw that a
store where I was had it in stock.

I went in to purchase it, and the price in store was a couple bucks higher
than the listed price online. I asked the clerk about it, and he kind of
shrugged and said he couldn't do anything about it.

I walked out without the book and ordered it from Amazon on my phone in the
parking lot.

I still can't fathom the decision-making that led to that pricing strategy.

~~~
jschwartzi
It actually costs them a ton of money to physically label the prices on each
book. B&N adds their own sticker over the top of the MSRP when they receive
the book. Changing the sticker every time the online price is changed would
cost them a small fortune.

If you're ever wondering why the online price differs from the in-store price
by a significant amount, usually it's not because the retailer is trying to
gouge you. It's because they would have to pay to have the shelves re-tagged.
Retailers don't use the regular store associates to re-tag shelves. Instead
they usually have roving teams of contractors who go around retagging
everything on the store shelves periodically.

The only way to really eliminate this is using electronic shelf labels, and
that's quite impossible in a bookstore. Much of their inventory is thinner
than the tags themselves.

~~~
kgwgk
He’s not complaining about the price tag not matching the online price. He’s
complaining about the cashier applying the tag price and not the lower price
advertised online. I also find it confusing when retailers apply different
prices online and at physical stores, unless the fact that the online price is
different is very clearly stated.

~~~
chii
but would you find it weird if one physical location charges a different price
to another store at a different physical location?

~~~
kgwgk
For some kinds of retail businesses I do expect one price independent of the
location within the country. Not for groceries, of course, but I do expect
consistent pricing in Zara or Ikea.

~~~
lotsofpulp
I see no reason to expect people in lower cost locales to subsidize people in
higher cost locales.

~~~
kgwgk
Companies that apply a nation-wide pricing scheme do see a reason, I guess.

~~~
lotsofpulp
Few retailers selling sufficient quantities of high margin goods might do it,
but most need to factor in local costs such as labor, property tax, and rent.
Especially once the gap in costs diverge significantly between regions.

------
ilamont
Indie publisher here. I deal with B&N through several programs they offer.
They have real market power in areas like college bookstores and sales to
schools. I think it's possible to view the website and its ebook platforms as
brimming with a lot of untapped opportunity.

And while they sometimes have some fantastic initiatives, they _really_
struggle with execution, such as the launch of their self-serve ad platform in
February ([http://leanmedia.org/bn-botches-ad-platform-rollout-can-
it-r...](http://leanmedia.org/bn-botches-ad-platform-rollout-can-it-relaunch-
with-better-rates/)). The print-on-demand launch
([http://www.barnesandnobleinc.com/press-
release/6_28_16_nook_...](http://www.barnesandnobleinc.com/press-
release/6_28_16_nook_press_print_platform/)) was also a miss, which I think
relates to its siloed and bureaucratic nature.

~~~
dragonwriter
> They have real market power in areas like college bookstores and sales to
> schools.

They _used to_ , but Barnes and Noble (ticket: BKS) (the firm being discussed
here) does not, AFAIK, any more, because Barnes and Noble Education (ticker:
BNED) was spun off in 2015, and is a separate public company.

------
wnissen
To save anyone the trouble, the book value (no pun intended) is only $474
million. You'd think the inventory alone would would be work more than the
average $675K per store that you get if you assume their other assets (minus
debt) are worth nothing.

~~~
Turing_Machine
Most of the books in a major bookstore like B&N are returnable. They're not
actually owned by the bookstore (at least not permanently, and not outright).
If the book doesn't sell within a specified period of time, the publisher will
take it back.

Hardcovers are generally returned intact. Paperbacks and magazines often just
require that the retailer tear off the cover and return that, while destroying
(at least in theory) the rest of the book. That's why you sometimes see that
warning in the front of paperback books and magazines about not buying it if
its cover has been removed... unscrupulous retailers will sometimes strip the
cover, return it for credit, then sell the stripped book on the black market.

------
MR4D
Thank god. Their website is so bad that it’s almost like they are trying not
to sells books.

Last week I had a gift card for BN that I needed to use, and tried to buy an
audiobook on bn.com from my iPhone. It was damn near impossible to find
anything and I still don’t know how to search for an audiobook.

Such a shame, as I used to love their physical stores.

Hopefully these folks will do a much better job.

~~~
mikestew
[https://m.barnesandnoble.com/b/audiobooks/_/N-2cnc?sk_page=d...](https://m.barnesandnoble.com/b/audiobooks/_/N-2cnc?sk_page=dept)
is what came up when I typed “audiobook” into the search box. There’s an
entire section.

~~~
MR4D
Yes, but let’s say you’re a George Soros fan and want to buy one of his audio
books. So you do a search for “Alchemy of Finance audiobook” and the result
you get is this [1].

Now here’s the kicker - it’s _out of stock_. WTF !?!

[1] - [https://www.barnesandnoble.com/w/the-alchemy-of-finance-
geor...](https://www.barnesandnoble.com/w/the-alchemy-of-finance-george-
soros/1116812877)

~~~
sumedh
> it’s out of stock. WTF !?!

Maybe some online publishing license has to be renewed?

------
b3b0p
I selfishly hope that the Barnes and Noble at the entrance inside Mall of
America stays (because I live downtown Minneapolis and take the Blue Line
directly there for fun). It's always busy, it's large, it's glorious and
stocks the most awesome video game and obscure magazines anywhere I have seen.
I love this store!

I always want to buy something, but living in small little tiny apartments all
my life and finally selling off the last of my video game collection (31 large
moving boxes filled) I want less physical items and buy all my books
digitally. I like physical more, but with iBooks and keeping it always
available at my finger tips on all my devices, it's way to convenient. I
realize I might be part of the problem. There is always the downtown library.

------
raleigh_user
My #1 bone to pick with Barnes and Noble was they wouldn’t price match their
online price in store.

There is a local store near me and probably once a month I want a new book. I
want the new book that day so I look online (Amazon, Barnes and Nobel,
borders, etc) and determine Barnes and Noble is only a dollar or two more than
Amazon. Fine because I want to read now.

Turns out, that was their online only price. If you want the book in their
store it costs more.

I’ve avoided buying at least 12 books from them in the last 2-3 months because
of it and went with Amazon.

------
throwaway_bn
I hope they don't kill B&N. I dropped out of college while pursuing a Physics
degree. After which I didn't have much in terms of career prospects. There was
a B&N near my apartment and I bought a lot of CS and programming books and
went on to get jobs at FAANGish companies. I think I've spent about $30,000 at
B&N over a 15 year period. I mostly buy from Amazon now but still go to B&N to
be able to quickly physically browse through various categories of books.

------
bytematic
Well Elliott is a vulture fund so we all know where this is going

~~~
timthorn
They already own Waterstones in the UK which they seem to be treating ok so
far:
[https://www.bbc.co.uk/news/business-48560539](https://www.bbc.co.uk/news/business-48560539)

~~~
tonyedgecombe
I was pleasantly surprised when I visited a Waterstones recently. They were
much improved over what they used to be.

------
Digory
I never thought I'd live to see the day the Riggios ran out of ideas to
squeeze more cash out that business.

They've been experts at killing a business slowly. Maybe only Sears has done a
better job of extracting value from a death spiral.

------
whalesalad
TIL Barnes and Noble still exists. I haven't seen one in what feels like a
decade.

~~~
Donald
B&N is surprisingly one of the few private establishments available in the US
for the simple pleasure of going in for a nice sit without feeling an
obligation to purchase something.

Would be a shame to see them go.

~~~
pkaye
They made it a little too comfortable. I'd remember their cafe would have
students sitting there studying or reading store books for hours. Meanwhile
customers ordering food would have no space to sit down and eat. At some point
they sold those cafe to a third party which modified the layout so tables were
tall and narrow so less comfortable for studying.

~~~
willio58
For our local one it sold the cafe to Starbucks.

------
dwighttk
Hopefully their first step is to replace their website with one that is
useable to purchase books. Oof and that app which is a watered down version of
the site that runs slower.

------
sergiotapia
I hope they don't close, I love going to Best Buy and browse around, then go
nextdoor to the B&N to see what's up in the latest comics, graphic novels, and
scifi books. My kids love the kid section too.

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ForHackernews
I hope they don't kill the Nook, it's a much better eReader than the Kindle:
uses standard epub format, fun and hackable, independent of the Amazon
behemoth.

~~~
Marsymars
Kobo is also pretty good!

------
todd3834
I always wondered why they are not trying to compete with Amazon in selling
books online. I know they also sell books online and I know they have the Nook
but I don’t think I have ever bought a book from their website. Is Amazon
executing so perfectly that they simply can’t be beat?

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speeder
I hope now I will be able to get my books...

I bought a lot of books from fictonwise because it was only store that sold
them to Brazilians. BN then bought them and put a rule where you can only
download those books, even though you bought them, of you are physically
inside USA

------
foxhop
I work remote and at least a few times a month I make it a point to work out
of my small towns public library. It's so cool! when I do pomodoros and take a
5 minute break, I walk the stacks and find so many books I want to read!

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musicale
Well I hope B&N will do better than Sears, Toys R Us, and RadioShack after
they were taken private and saddled with unsustainable debt.

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tonetheman
Every once in a while I still go in there and buy a book for more than I need
to... just to hope that I am keeping the store open.

I miss bookstores.

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flyGuyOnTheSly
Title should read $683M (not $638M)

~~~
selimthegrim
I emailed dang to correct it.

------
cybersnowflake
I certainly think there is a niche for the absolute last physical bookstore in
town.

------
vikramkr
I really hope I don't read any articles a few years from now about Barnes and
Noble filing for bankruptcy after being crushed by the immense debt of a
leveraged buyout...

~~~
Donald
> after being crushed by the immense debt of a leveraged buyout

$680M is in the realm of a cash transaction for a hedge fund, and indeed, if
you look at their SEC filing (below), this is an all-cash transaction. Expect
aggressive cost-cutting from Elliot (BNs around me seem to be well staffed
with lots of people standing around with little to do - so layoffs likely in
the future) but the store itself should be able to survive.

[http://investors.barnesandnobleinc.com/static-
files/e605e233...](http://investors.barnesandnobleinc.com/static-
files/e605e233-c8c7-4337-ad5f-e080a3e201dc)

~~~
mwexler
Wow, you have a lux B&N. Most of them are desperately understaffed, between
the need to reshelve books, receive inventory, manage "cash-wrap" for the long
checkout lines, corral running kids, ask the guy destroying the manga to stop
folding the covers, straighten the magazines that have been scattered by
readers, pick up the trash patrons leave all over the store, check the
bathrooms for various "presents" people leave behind, and oh yeah, help folks
find the exact book they wanted from the query "that book by that guy who was
a chef and then did special forces but now has that book about contract
bridge" so they can flip through it and order it from Amazon.

The cost cutting has happened in many places and if it continues, sadly, even
a hedge fund won't be able to save it. Sure, lots of room to improve, and a
mix of cut the bad and add the good will help. But don't fool yourself, retail
is hard and B&N, the good ones, is real work. I wish them the best but it's a
hard road.

~~~
selimthegrim
I seem to remember reading a story a few years ago about them laying off all
their long tenured employees

~~~
selimthegrim
[https://www.reddit.com/r/books/comments/7xqh3f/barnes_noble_...](https://www.reddit.com/r/books/comments/7xqh3f/barnes_noble_layoffs/)

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mrnobody_67
I'm betting they try to flip it to Amazon for $1.8b in 18 months time :)

~~~
Rapzid
Amazon really sucks if you are trying to buy a physically nice book these
days. I've had to make so many returns this year. Most recently after waiting
almost 2 months for my hardcover "On The Origin of Species", it has a box
cutter cut on the front cover :S

A physical presence would be great for inspecting and purchasing hardcover if
quality matters. Amazon doesn't seem to care much what condition they arrive
at your house in.

------
WalterBright
Amazon has recently opened bookstores in shopping malls.

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ausjke
the writing has been on the wall for quite a while, sigh.

it gives people fond of memories, unlike amazon while you can get something
cheaper, amazon has nothing else

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amluto
Maybe they’ll make the Nook better.

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mtgx
In other words, B&N is to be dismantled and sold for parts in the near future.

~~~
garren
At the very least, maybe it turns back into a bookstore rather than a
cafe/book/music/board game/toy store. It's the board games, comic/anime
figurines, and kitchy junk (e.g., polaroid cameras, overpriced drawing and
writing kits, etc.) that make me feel like they've kind of lost their way.

~~~
vkou
The board games, figurines, and the kitchy, disposable crap is what keeps them
in business. The margins on those items are much higher then on books, and
they sell faster than any random book on their shelves.

Source: My wife worked at Half-Price Books (Which is doing a bit better than
B&N atm) for a few years. It also had multiple shelves of disposable crap,
that made them a lot of money.

~~~
rjohnk
I was going to say this. The B&N where I live has a large pop culture area
where the CD/Music section used to be. Star Wars, Harry Potter, LOTR, Stranger
Things dedicated sections with lots of Funko and similar products. Really
clean and high quality stuff if your into collecting. I see this as the only
way they can survive.

