Rare Book Monthly

Articles - April - 2013 Issue

Barnes & Noble: Yesterday's Goliath Struggles to Survive

B&n04-13

If the typical, private bookseller is finding these to be complicated times for retail, then perhaps they can sympathize with their dreaded competitor from the 1990s, Barnes & Noble. Barnes & Noble swept through the new book business twenty years ago, leaving a string of failed private bookshops in their wake. Few could compete once the mega-store came to town, with its large selection, comfortable chairs for reading, coffee and pastries. For many, it was the booksellers' version of Wal-Mart vs. Main Street. We all know how that turned out.

Now, twenty years have passed, and it's Barnes & Noble that is fighting for its life. Amazon has stolen much of its sales by selling online. They do not carry the overhead of local stores, enabling them to sell for lower prices. Add to that Amazon's strategy of accepting low margins so as to dominate a business and it is hard for anyone to compete on price. With high volumes shipping from central locations, Amazon is also in the best position to stock the largest inventory and widest selection of titles. The tables have turned on B&N and now the world watches to see if they can find a way out of their predicament, or do they go the way of their once greatest rival, Borders.

As if this wasn't enough, a few years ago, Amazon began heavily promoting electronic books. They developed their Kindle e-reader and began selling e-books at prices even lower than their discounted print editions. A bad situation for B&N quickly became worse. A minority, but still significant percentage of book sales moved to this new, paper-free format.

So, Barnes & Noble reacted. They decided to go head to head with Amazon in this new form. That would not be easy – competing in a format even more suitable to internet retailing than was paper books, which had to be shipped. B&N's one advantage – instant gratification – would not be an advantage with e-books. Nonetheless, B&N felt they had one advantage – that of being able to display their e-readers and show customers how to use them. And then there was one more positive for B&N. Though this was not their field, they came out with a very good e-reader, one many consumers preferred to the Kindle. And, B&N quickly made their Nook even more – an electronic reader with features of a tablet computer, such as email and internet access. They had a product that could compete with Apple for the tablet market as well as Amazon for the e-reader market.

Barnes & Noble did a great job with this new medium, but still they suffered from one major disadvantage. B&N is small. They have nowhere near the financial clout of an Amazon or Apple. Their Nook was like Research in Motion's Blackberry competing against Apple's iPhone for the smart phone market. Or, like Main Street competing against Wal-Mart for retail goods. Size matters. It is hard to compete against the behemoths, and besides which, not many people thought of Barnes & Noble as a technology company. Sales early on were very good for the Nook, but as time has gone by, sales have declined, even if it is a very nice product. Sales of Nook e-readers and e-books dropped by 25% during the most recent holiday season. B&N simply does not have comparable marketing prowess to the giants.

Sales have slipped despite a sizable cash investment last year by Microsoft. B&N separated its Nook division from the rest of its business, drawing in $300 million from Microsoft, which is belatedly trying to catch Apple in the latest technology. If you had owned Barnes & Noble's stock before the Microsoft investment, you could have doubled your money when that news was announced. However, it has not been enough to stem the tide, and most of those gains in the company's stock disappeared as the year wore on. Meanwhile, Microsoft has developed its own tablet, though it is hardly setting the world on fire.

What is next for Barnes & Noble? There are lots of rumors. Reports are that B&N's founder and Chairman, Leonard Riggio, is contemplating making a bid for just the stores. The stores, though struggling, are still profitable and their all-important cash flow is positive. The Nook division, however, is losing money and burning cash, though it is a participant in tomorrow's technology, rather than yesterday's retailing. However, the losses have not stopped B&N from entering new deals with several Hollywood studios to obtain rights to videos for display on their Nooks. It's full speed ahead, even while losses mount. Some have speculated that Microsoft might make a bid for for the rest of the Nook division (it owns 16.8% already). Of course, by the time Microsoft gets around to investing in new technology, it's old technology. Can a PC-focused company save the Nook when it is unclear PCs can save themselves? Curiouser and curiouser!” cried Alice.

Rare Book Monthly

  • <b>19th Century Shop:</b> Charles Darwin on sexuality and the transmission of hereditary characteristics: Autograph Letter Signed to Lawson Tait. Down, 17 January [1877].
    <b>19th Century Shop:</b> MILTON, JOHN. <i>Paradise Lost. A Poem written in ten books.</i> London: 1667. A very rare example with the contemporary binding untouched and with a 1667 title page.
    <b>19th Century Shop:</b> Hamilton secures the ratification of the Constitution: <i>The Debates and Proceedings of the Convention of the State of New-York, assembled at Poughkeespsie, on the 17th June, 1788.</i>
    <b>19th Century Shop:</b> The social contract “Man is born free, and everywhere he is in chains”: ROUSSEAU, JEAN-JACQUES. <i>Principes du Droit Politique [Du Contract Social]</i>. Amsterdam: Michel Rey, 1762
    <b>19th Century Shop:</b> “The first English textbook on geometrical land-measurement and surveying”: BENESE, RICHARD. <i>This Boke Sheweth the Maner of Measurynge All Maner of Lande…</i>
  • <b>Bonhams: Exploration and Travel, Featuring Americana, Part I. September 25, 2018</b>
    <b>Bonhams, Sep. 25:</b> Shackleton, Ernest. <i>Aurora Australis.</i> Printed at the sign of 'The Penguins'; East Antarctica, 1908. $70,000 to $100,000
    <b>Bonhams, Sep. 25:</b> Shackleton, Ernest. <i>South Polar Times.</i> 1st edition, limited issue. from the library of Michael Barne. $20,000 to $30,000
    <b>Bonhams, Sep. 25:</b> General Washington's <i>Proceedings of a General Court Martial... of Major General Lee.</i> Philiadelphia, 1778. 100 copies printed for Congress. BOUND WITH: ...Court Martial... of St Clair and ...Schuyler. $25,000 to $35,000
    <b>Bonhams: Exploration and Travel, Featuring Americana, Part I. September 25, 2018</b>
    <b>Bonhams, Sep. 25:</b> <i>The Voice of the People.</i> Boston, 1754. Rare pamphlet on the Excise Tax. Nathaniel Sparhawk's copy. $4,000 to $6,000
    <b>Bonhams, Sep. 25:</b> Autograph Letter Signed ("S.L. Clemens"), offering extensive hard-earned advice on writing, 5 pp, 1881. $30,000 to $50,000
    <b>Bonhams, Sep. 25:</b> After Fra Egnazio Danti. <i>L'Ultime Parti not:e nel Indie Occid:ntli" [The last known parts of the Western Indies].</i> Painted Map of California, Western Mexico, and Japan. $70,000 to $100,000
    <b>Bonhams: Exploration and Travel, Featuring Americana, Part I. September 25, 2018</b>
    <b>Bonhams, Sep. 25:</b> Ptolemaeus, Claudius. <i>Geographie opus nouissima...</i> 1513. The most important edition of Ptolemy, containing the Admiral's Map. $250,000 to $350,000
    <b>Bonhams, Sep. 25:</b> De Arellano, Don Alonso. Manuscript, his <i>"Relación mui singular y circunstanciada... Capitán del Patax San Lucas,"</i> manuscript copy from the Sir Thomas Phillips collection. $50,000 to $80,000
    <b>Bonhams, Sep. 25:</b> Purchas, Samuel. <i>Purchas his Pilgrimes.</i> First edition. With John Simth's engraved map of Virginia. $70,000 to $100,000
    <b>Bonhams: Exploration and Travel, Featuring Americana, Part I. September 25, 2018</b>
    <b>Bonhams, Sep. 25:</b> Lewis, Meriwether. Contemporary manuscript true copy of his final power of attorney, 1809. $8,000 to $12,000
    <b>Bonhams, Sep. 25:</b> <i>A New Method of Macarony Making, as Practiced at Boston in North America.</i> Mezzotint. London, 1774. $5,000 to $7,000
    <b>Bonhams, Sep. 25:</b> <i>Scientific Base Ball Pitching: A Treatise on the Pitcher, Pitching, Origin and Philosophy of the Curve.</i> Chicago, 1897. $2,000 to $3,000
  • <b>Swann Auction Galleries Sep 27:</b> Franklin H. Brown, <i>State Sovereignty, National Union,</i> Chicago, 1860. $6,000 to $9,000.
    <b>Swann Auction Galleries Sep 27:</b> Thomas Paine, <i>The American Crisis,</i> Fishkill, NY, December 1776. $25,000 to $35,000.
    <b>Swann Auction Galleries Sep 27:</b><br>The Aitken Bible, Philadelphia, 1781. $20,000 to $30,000.
    <b>Swann Auction Galleries Sep 27:</b> Francisco Loubayssin de Lamarca, probable first edition of the first novel set in the Spanish New World, Paris, 1617. $15,000 to $25,000.
    <b>Swann Auction Galleries Sep 27:</b> Juan de la Anunciación, <i>Sermonario en lengua mexicana,</i> first edition, first book of sermons in Nahuatl, Mexico, 1577. $30,000 to $40,000.
    <b>Swann Auction Galleries Sep 27:</b> Maturino Gilberti, <i>Thesoro spiritual en lengua de Mechuacá,</i> first edition, Mexico, 1558. $15,000 to $25,000.
    <b>Swann Auction Galleries Sep 27:</b> Commission of William O. Stoddard as secretary to the president, signed by Lincoln, Washington, 1861. $7,000 to $10,000.
    <b>Swann Auction Galleries Sep 27:</b> <i>Clay and Frelinghuysen,</i> flag banner, circa 1844. $8,000 to $12,000.
    <b>Swann Auction Galleries Sep 27:</b> Daguerreotype of a man believed to be Frederick Granger Williams Smith, son of Joseph Smith, circa late 1850s. $10,000 to $15,000.
    <b>Swann Auction Galleries Sep 27:</b> John C. Wolfe, <i>Portrait of Abraham Lincoln,</i> oil on board in period wooden frame, circa 1860s. $12,000 to $18,000.
    <b>Swann Auction Galleries Sep 27:</b> Francis W. Winton, manuscript on pow-wows with indigenous Canadians, 1881. $15,000 to $25,000.
    <b>Swann Auction Galleries Sep 27:</b> Family letters from two young daguerreotype artists, 1826-79. $10,000 to $15,000.

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