4 ms·

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

by 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.

by jakarta 16y ago

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.