5 ms·

Barnes & Noble puts itself up for sale

28 points by grellas 16y ago

jackowayed 16y ago
Wow, I figured it would take someone huge to buy them, but it turns out their market cap is only $755M. Amazon's is $54B
- sliverstorm 16y ago
  I wonder if Amazon would have any use for them?
  - wheels 16y ago
    Amazon has typically refused to acquire any company that would expose it to nationwide (or even Californian) sales tax.
    - frossie 16y ago
      Agreed, but to my confusion Amazon has been very aggressive in competing with B&N. Every price drop of the Kindle in the last 9 months has seemingly been in response to a price drop of the Nook (B&N's e-reader). Given that B&N is like a gnat on Amazon's elephant, I haven't been able to figure out what is going on. So it wouldn't surprise me if Amazon somehow got involved here, perhaps in a way that would avoid the sales tax issue.
  - talbina 16y ago
    Market share.
  - jacoblyles 16y ago
    Sounds like an anti-trust problem.
tzs 16y ago
> Leonard Riggio, the company's founder and largest stockholder, has informed the Board that, in light of its decision to explore strategic alternatives, he intends to consider the possibility of participating in an investor group to acquire the company For those curious how Riggio, born in 1941, could be a founder of a company formed in 1873, it appears that Riggio's bookstore company bought Barnes and Noble in 1971, and adopted its name.
protomyth 16y ago
755.71M market cap - 510.40M debt - would be an interesting way to instantly get a lot of retail locations (700+ stores and 600+ campus stores). I guess I should expect the Apple and Microsoft sites to contemplate each companies purchase. Probably some HP action in there too (so they can be more like Apple).
- aspiringsensei 16y ago
  You seem to be assuming they own all of their retail stores. Is this true?
  - jakarta 16y ago
    On their balance sheet, under assets, they record about $812M worth of value for their net property, plant, and equipment. With 720 store locations that comes out to about $1M in value per store. That's probably understated by a lot because of the excess depreciation charge they take.
    - aspiringsensei 16y ago
      I would humbly submit that PP&E likely is dominated by warehousing facilities and books at a place like B&N. It may include some real estate, but I wouldn't bet on it representing the value of 720 store locations, even with aggressive depreciation schedules. I would bet their PP&E likely has a large emphasis on esoteric distribution equipment, as well as some stores. I am just wildly speculating though: the business of selling books is too crappy (low cashflow yeilds) to get me interested enough to crack open a 10-k.
  - code_duck 16y ago
    There's one at a mall near me... that's definitely leased.
    - protomyth 16y ago
      Most of the Apple stores are leased also.
jakarta 16y ago
To me, it is pretty fascinating to see how Barnes & Noble has fared versus Borders (now only 1/10 of BN's market cap). Borders made a number of miscalculations that have really cost them dearly. They passed up on running their own online store -- outsourcing it to Amazon, but worse they bet big on selling media merchandise at their stores (DVDs, CDs, Games). I am sure originally the media decision worked, but as CDs died out (and DVD sales are dropping off), they were screwed. Barnes & Noble on the other hand went with their own online store and bet bigger on having their own publishing arm (plus a college textbooks biz). Obviously in the longer run this has worked out but they are still facing extinction. I imagine that bookstores will still continue to exist going forward, but they will be far fewer in numbers akin to record stores. My guess is that Ron Burkle was going to make a play for the whole company so Riggio had to quickly react with his own potential offer (note the language he used in the press release). Some people will try to play up the store real estate value aspect of these companies but I think that is not a good angle. Borders / B&N have -huge- stores on a sqft basis. That presents a big problem for potential businesses looking to purchase a location. I think the stores are most appropriate for maybe furniture stores but those are still recovering from tough times during the crisis. I don't expect them to start investing any time soon.
- muhfuhkuh 16y ago
  What's worse is that their stores are in more well-to-do (i.e., well, or at least better, read) suburbs and exurbs, so you can't do a "package sale" to any company who's doing well in this environment (Dollar Tree or Big Lots, for example) to take up space there, as the property owner and neighboring stores in the strip would balk at the idea of their anchor store going downmarket. So, they'll have to pawn each property off piecemeal, which is much more laborious.
- commandar 16y ago
  >but worse they bet big on selling media merchandise at their stores (DVDs, CDs, Games). B&N did experiment with this market, though; keep in mind that they owned Gamestop up until 2004.
mattmaroon 16y ago
The edited title is very misleading, not only because it's a publicly traded company (and thus always for sale) but also because all they're really saying is "yeah we know we're plummeting, but don't sell your shares."
mkramlich 16y ago
It's as if B&N suddenly realized, "We're mostly selling just bits and bytes, but at a heavy markup and with tons of warm bodies and brick and mortar. The Internet is going to eat our lunch. Holy shit!" Except the rest of us realized this years ago. That said, there are still things about a physical bookstore that the Internet doesn't "do better/cheaper". One is the pleasure of perusing the bookshelves. Second is the social factor of seeing other folks there and striking up conversations. Third is the Starbucks-like factor: every B&N I've been to seems to have a mini-coffee shop inside of it, complete with tables and snacks and power outlets. Very smart move, because we still can't download tables or coffee over the Internet, let alone for free.
- frossie 16y ago
  B&N have been doing a good job not only selling their e-reader, but bringing the nook readers into the store by various promotions (show your nook and get a free book, show your nook and get free coffee) and the ability to browse any e-book on your nook while physically in the store. Clearly a lot of thought has gone into the nook in-store experience. So I can see how bookstores could survive as essentially a book showroom and congregating space. Of course you don't need as much square footage for that, which would also lower costs.
- code_duck 16y ago
  It's true, I can flirt in person at B&N, and Amazon.com provides no such functionality! I go there for the experience of getting out of my house and walking around in the presence of actual people (I work from home). The coffee shop isn't really as inviting as Starbucks or Caribou, though, in my locality, though it is nice enough. They just stopped charging for wifi a few months ago.
  - mkramlich 16y ago
    Same here, and I also often work from home or coffee shops. I live in suburban Colorado and there are 3 places nearby I can go to almost assuredly see good looking women on a daily basis, even weekdays, even the middle of the day: Target, B&N and Starbucks. (Target is the most reliable, for whatever reason.) Walmart tends to have the worst looking women, so even if I could get groceries there a few cents cheaper per item, it's just not worth the impact on my overall quality of life. One advantage to B&N over Starbucks is that at Starbucks I feel obligated to buy something as micro-rent for the table space, even if I'm not hungry/thirty. At B&N I have the excuse of browsing for books and magazines, so every trip can be free, guilt-free. Starbucks has awesome bathrooms though, and lower chance of screamers, er, I mean, kids.
dangrover 16y ago
One of the main reasons I'd go to a brick-and-mortar store is to be able to pick up a book that day rather than get it shipped. Borders has nice kiosks you can use to look up where a book is, but at Barnes and Noble you have to talk to someone at the information desk and watch over their shoulder to make sure they're spelling the name of the book right, etc. Inconvenient. Also, usually at brick-and-mortar stores, if they don't have something they'll say "but we can order it for you", which has never made sense to me. If I wanted to order it, I'd do so more cheaply online. Bookstores also need to focus on the browsing experience and the immediate gratification aspect if they want to compete with Amazon.
- code_duck 16y ago
  The B&N I go to has touchscreen kiosks. I don't know if you can order straight from it or only check local inventory.
- gwern 16y ago
  > Also, usually at brick-and-mortar stores, if they don't have something they'll say "but we can order it for you", which has never made sense to me. If I wanted to order it, I'd do so more cheaply online. I did this when I was younger. The point was, I did not have a credit card. By ordering in the store, I could pay cash or use gift certificates. (Ask a parent? Buy a prepaid debit card? Oh, you funny funny people.)
zandorg 16y ago
In this town in the UK, all the 2nd-hand bookshops are shutting down one by one due to Amazon's 'used book' sales. It's hard to sell a book for £3.50 when you can buy it from Amazon for 1 penny plus £2.75 postage.

28 points by grellas 16y ago

Wow, I figured it would take someone huge to buy them, but it turns out their market cap is only $755M. Amazon's is $54B

sliverstorm 16y ago
I wonder if Amazon would have any use for them?
- wheels 16y ago
  Amazon has typically refused to acquire any company that would expose it to nationwide (or even Californian) sales tax.
  - frossie 16y ago
    Agreed, but to my confusion Amazon has been very aggressive in competing with B&N. Every price drop of the Kindle in the last 9 months has seemingly been in response to a price drop of the Nook (B&N's e-reader). Given that B&N is like a gnat on Amazon's elephant, I haven't been able to figure out what is going on. So it wouldn't surprise me if Amazon somehow got involved here, perhaps in a way that would avoid the sales tax issue.
- talbina 16y ago
  Market share.
- jacoblyles 16y ago
  Sounds like an anti-trust problem.

tzs 16y ago

> Leonard Riggio, the company's founder and largest stockholder, has informed the Board that, in light of its decision to explore strategic alternatives, he intends to consider the possibility of participating in an investor group to acquire the company For those curious how Riggio, born in 1941, could be a founder of a company formed in 1873, it appears that Riggio's bookstore company bought Barnes and Noble in 1971, and adopted its name.

protomyth 16y ago

755.71M market cap - 510.40M debt - would be an interesting way to instantly get a lot of retail locations (700+ stores and 600+ campus stores). I guess I should expect the Apple and Microsoft sites to contemplate each companies purchase. Probably some HP action in there too (so they can be more like Apple).

aspiringsensei 16y ago
You seem to be assuming they own all of their retail stores. Is this true?
- jakarta 16y ago
  On their balance sheet, under assets, they record about $812M worth of value for their net property, plant, and equipment. With 720 store locations that comes out to about $1M in value per store. That's probably understated by a lot because of the excess depreciation charge they take.
  - aspiringsensei 16y ago
    I would humbly submit that PP&E likely is dominated by warehousing facilities and books at a place like B&N. It may include some real estate, but I wouldn't bet on it representing the value of 720 store locations, even with aggressive depreciation schedules. I would bet their PP&E likely has a large emphasis on esoteric distribution equipment, as well as some stores. I am just wildly speculating though: the business of selling books is too crappy (low cashflow yeilds) to get me interested enough to crack open a 10-k.
- code_duck 16y ago
  There's one at a mall near me... that's definitely leased.
  - protomyth 16y ago
    Most of the Apple stores are leased also.

jakarta 16y ago

To me, it is pretty fascinating to see how Barnes & Noble has fared versus Borders (now only 1/10 of BN's market cap). Borders made a number of miscalculations that have really cost them dearly. They passed up on running their own online store -- outsourcing it to Amazon, but worse they bet big on selling media merchandise at their stores (DVDs, CDs, Games). I am sure originally the media decision worked, but as CDs died out (and DVD sales are dropping off), they were screwed. Barnes & Noble on the other hand went with their own online store and bet bigger on having their own publishing arm (plus a college textbooks biz). Obviously in the longer run this has worked out but they are still facing extinction. I imagine that bookstores will still continue to exist going forward, but they will be far fewer in numbers akin to record stores. My guess is that Ron Burkle was going to make a play for the whole company so Riggio had to quickly react with his own potential offer (note the language he used in the press release). Some people will try to play up the store real estate value aspect of these companies but I think that is not a good angle. Borders / B&N have -huge- stores on a sqft basis. That presents a big problem for potential businesses looking to purchase a location. I think the stores are most appropriate for maybe furniture stores but those are still recovering from tough times during the crisis. I don't expect them to start investing any time soon.

muhfuhkuh 16y ago
What's worse is that their stores are in more well-to-do (i.e., well, or at least better, read) suburbs and exurbs, so you can't do a "package sale" to any company who's doing well in this environment (Dollar Tree or Big Lots, for example) to take up space there, as the property owner and neighboring stores in the strip would balk at the idea of their anchor store going downmarket. So, they'll have to pawn each property off piecemeal, which is much more laborious.
commandar 16y ago
>but worse they bet big on selling media merchandise at their stores (DVDs, CDs, Games). B&N did experiment with this market, though; keep in mind that they owned Gamestop up until 2004.

mattmaroon 16y ago

The edited title is very misleading, not only because it's a publicly traded company (and thus always for sale) but also because all they're really saying is "yeah we know we're plummeting, but don't sell your shares."

mkramlich 16y ago

It's as if B&N suddenly realized, "We're mostly selling just bits and bytes, but at a heavy markup and with tons of warm bodies and brick and mortar. The Internet is going to eat our lunch. Holy shit!" Except the rest of us realized this years ago. That said, there are still things about a physical bookstore that the Internet doesn't "do better/cheaper". One is the pleasure of perusing the bookshelves. Second is the social factor of seeing other folks there and striking up conversations. Third is the Starbucks-like factor: every B&N I've been to seems to have a mini-coffee shop inside of it, complete with tables and snacks and power outlets. Very smart move, because we still can't download tables or coffee over the Internet, let alone for free.

frossie 16y ago
B&N have been doing a good job not only selling their e-reader, but bringing the nook readers into the store by various promotions (show your nook and get a free book, show your nook and get free coffee) and the ability to browse any e-book on your nook while physically in the store. Clearly a lot of thought has gone into the nook in-store experience. So I can see how bookstores could survive as essentially a book showroom and congregating space. Of course you don't need as much square footage for that, which would also lower costs.
code_duck 16y ago
It's true, I can flirt in person at B&N, and Amazon.com provides no such functionality! I go there for the experience of getting out of my house and walking around in the presence of actual people (I work from home). The coffee shop isn't really as inviting as Starbucks or Caribou, though, in my locality, though it is nice enough. They just stopped charging for wifi a few months ago.
- mkramlich 16y ago
  Same here, and I also often work from home or coffee shops. I live in suburban Colorado and there are 3 places nearby I can go to almost assuredly see good looking women on a daily basis, even weekdays, even the middle of the day: Target, B&N and Starbucks. (Target is the most reliable, for whatever reason.) Walmart tends to have the worst looking women, so even if I could get groceries there a few cents cheaper per item, it's just not worth the impact on my overall quality of life. One advantage to B&N over Starbucks is that at Starbucks I feel obligated to buy something as micro-rent for the table space, even if I'm not hungry/thirty. At B&N I have the excuse of browsing for books and magazines, so every trip can be free, guilt-free. Starbucks has awesome bathrooms though, and lower chance of screamers, er, I mean, kids.

dangrover 16y ago

One of the main reasons I'd go to a brick-and-mortar store is to be able to pick up a book that day rather than get it shipped. Borders has nice kiosks you can use to look up where a book is, but at Barnes and Noble you have to talk to someone at the information desk and watch over their shoulder to make sure they're spelling the name of the book right, etc. Inconvenient. Also, usually at brick-and-mortar stores, if they don't have something they'll say "but we can order it for you", which has never made sense to me. If I wanted to order it, I'd do so more cheaply online. Bookstores also need to focus on the browsing experience and the immediate gratification aspect if they want to compete with Amazon.

code_duck 16y ago
The B&N I go to has touchscreen kiosks. I don't know if you can order straight from it or only check local inventory.
gwern 16y ago
> Also, usually at brick-and-mortar stores, if they don't have something they'll say "but we can order it for you", which has never made sense to me. If I wanted to order it, I'd do so more cheaply online. I did this when I was younger. The point was, I did not have a credit card. By ordering in the store, I could pay cash or use gift certificates. (Ask a parent? Buy a prepaid debit card? Oh, you funny funny people.)

zandorg 16y ago

In this town in the UK, all the 2nd-hand bookshops are shutting down one by one due to Amazon's 'used book' sales. It's hard to sell a book for £3.50 when you can buy it from Amazon for 1 penny plus £2.75 postage.