UK trade bookstore results worst March since 2005

The Bookseller: "Spending in March has hit a six-year low, with sales slumping by 8.7% year on year."

Memo from Hachette to brick-and-mortar stores: You ARE the Weakest Link

CS Monitor: "In an Amazon era when many readers browse bookstores at leisure, then log into Amazon to place their order, bricks and mortar booksellers rarely catch a break. Now, with the posthumous release of David Foster Wallace’s 'The Pale King,' it seems the Hachette Book Group has eliminated the initial bookstore browse and buzz, dealing another blow to booksellers. ... "

Borders Liquidators Race Clock, Squeeze Cash From Doomed Stores

Businessweek: " ... The liquidators must sell as much as possible before their contract expires in order to maximize profit. Afterwards, their options are limited: They can sell stock to a non-retail customer, hang onto it and attempt to sell it later when liquidating other stores, or abandon it. They can’t sell to wholesalers or bulk purchasers who may return Borders stock to publishers, and thus Borders’s competitors. ... "

No Buyers for Barnes & Noble at 60 Cents on Dollar

Businessweek:

Even with Barnes & Noble Inc. selling for 60 cents on the dollar, the cheapest retailer in America still isn’t cheap enough to entice private-equity buyers looking for cash. 

The bookseller founded by Leonard Riggio has fallen 28 percent since putting itself up for sale seven months ago, according to data compiled by Bloomberg. Losses accelerated after the New York-based company eliminated its dividend in February, leaving Barnes & Noble at a 15-year low last week. The chain is the only U.S. retailer with a value of more than $500 million trading at a discount to its net assets, the data show. 

Barnes & Noble destroyed 80 percent of its shareholders’ value since rising to a record five years ago as Riggio, who bought the bookstore in 1971, fell behind Amazon.com Inc. in selling books over the Internet and starting an electronic reader business. Now, with Barnes & Noble piling money into its Nook reader to compete with the Kindle and Apple Inc.’s iPad and analysts projecting its first loss in a decade, the only buyer left may be Riggio himself as private-equity firms back away after the bankruptcy of Borders Group Inc., according to Wall Street Strategies Inc. in New York. 

“There’s not much to like,” said Brian Sozzi, Wall Street Strategies’ retail analyst. “One thing I’ve learned in retail is once the model starts to go against you it’s tough to pull yourself out. Assets on their books are losing value so quickly. Other than Riggio, I don’t know who else would want it.” ...

Books-A-Million sales slipped last year

In other words they are doing great, compared to Borders. Birmingham Business Journal:

Books-A-Million Inc. (Nasdaq: BAMM) reported a 2.7 decrease in sales for its last fiscal year.

The Birmingham-based book retailer said sales totaled $495 million for the year ended Jan. 29, 2011, according to a news release.

Comparable store sales, or sales at stores open at least a year, dropped nearly 5 percent and net income fell 35 percent to $8.9 million, compared $13.8 million in the previous fiscal year.

“The results for the fiscal year illustrate a dynamic and rapidly changing retail environment for booksellers,” said Chairman Clyde B. Anderson. “We are also pleased with our ability to manage inventories and maintain a strong balance sheet giving us flexibility to address the challenges and opportunities ahead.”

Anderson said the company successfully launched a partnership with Nook in the fourth quarter to sell e-readers and its toy and game and electronic accessories businesses performed well.

During the fourth quarter, Books-A-Million had a 2.6 percent decline in sales to $153.1 million and a 6.7 percent drop in comparable store sales.

Waterstone's Managing Director: Academic bookselling at "crisis point"

The Bookseller: "Waterstone's has called for academic publishers to 'significantly' increase their support for the chain, warning bricks and mortar academic bookselling could vanish from the high street within a few years. The retailer's m.d. Dominic Myers told delegates at the Bookseller Association’s annual Academic, Professional and Specialist Bookselling Group conference last week that the academic bookselling industry was at a “crisis point,” in which 2011 would be a defining year. ... "

re: Borders UK meltdown

The Bookseller: "Waterstone's could be best placed to capitalise from a loss in market share by Borders, according to an influential retail analyst. In a wide-ranging note on entertainment retail, Paul Smiddy at HSBC said this week that between space re-allocation and store closures, Borders would lose market share over the next year, with Waterstone's in the best position to gain from this. ... "

Borders closing 28 additional stores, making final count 228

Reuters: "Borders Group Inc is set to close another 28 of its superstores on top of the 200 locations it is already shutting down as part of its reorganization under bankruptcy protection. Those locations will close by the end of April and include stores in Hollywood, California, and Stamford, Connecticut. The closings will leave Borders with only half of its superstores. 'We reached the determination about these stores after a further review of their ongoing economic viability,' Borders spokeswoman Mary Davis said in a statement. ... "

B&N Pines for a Storybook Ending

WSJ: "It's never fun to realize, after starting a book, that the plot is so familiar it loses any element of surprise. The question for Barnes & Noble shareholders is whether they are living such a predictable tale. The stock's 47% plunge in the past three weeks, to below $10, its lowest point since the early 1990s, suggests investors feel that way. Last month's suspension of the dividend, to preserve cash for digital investments, likely sent income-oriented investors heading for the exits. But despite Barnes & Noble's claim to be 'now a growth company,' growth investors appear to be staying away—with good reason."

The chain gets smaller margin on eBooks than on physical books, the latter market shrinking as the former grows. It also has the brick-and-mortar monkey on its back, plus:

"It doesn't help that Barnes & Noble has taken on long-term debt for the first time in several years, partly to fund the $596 million cash buyout in 2009 of the Barnes & Noble college-store chain from Len Riggio, chairman and 30% shareholder. The price paid was more than Barnes & Noble's now-shrunken market capitalization. While the college chain's earnings have proved valuable as Barnes & Noble invests in digital, its sales at stores open more than a year have declined since the purchase. The deal would have looked better for Barnes & Noble shareholders if Mr. Riggio had taken stock rather than cash."

My late father-in-law Bill Bartkovick, a longtime Senior VP at B&N, founded the Barnes & Noble College Division. He would be the first to tell you that this division's days are numbered [see story below], and that the deal benefited Lenny and his family entirely at the expense of shareholders.

Luddites Whining: The End Of Bookstores

Nicole Krauss uses the pages of The New Republic to moan about our losing a certain curatorial element which she believes can only be found in the brick-and-mortar bookstore.

For Borders, a Scramble to be Lean

Trachtenberg/Spector, WSJ: "In a bid to boost to its digital prospects, [Borders President Mike] Edwards said Kobo Inc., the Toronto-based e-book retailer in which Borders holds a stake, will begin sharing some of the proceeds of every Kobo e-book sold in the U.S. The move, said Mr. Edwards, will enable Borders to more effectively compete on the digital front with companies such as Amazon.com Inc., Barnes & Noble Inc. and Apple Inc. In turn, Borders, Ann Arbor, Mich., will put all of its online and in-store marketing and promotional muscle behind the Kobo brand. Mr. Edwards said that in addition to selling Kobo e-readers, Borders also will continue to sell readers from other makers." This is still a death watch. The restructuring = chemotherapy, delaying the inevitable while also prolonging the agony.

Borders Meets with Publishers Over Terms; Conference Call Set

PW: "Ahead of a conference call set for Friday afternoon to give vendors an update on its business plan and restructuring, Borders merchandise executive have been in New York this week negotiating with publishers to resume direct shipments to the embattled chain. At present, Ingram is doing most of the shipping with publishers only shipping on a cash basis. According to sources, Borders is asking for cash in advance terms for a month with more regular terms afterwards."

Len Riggio: American trade on cusp of "transformational growth"

If I were Lenny, I wouldn't mention Borders either. The Bookseller: "Barnes & Noble chairman Len Riggio has said the American book trade is on the cusp of 'transformational growth' led by digital sales, in a bullish keynote address to the annual meeting of the Association of American Publishers (AAP), in which he stated that that the book chain remained 'committed now as ever to the future of [its] stores'. Riggio did not talk about B&N's falling share price or whether he might buy the company back; he did not mention Borders. ... "

As Borders Sinks, Barnes & Noble Scrambles to Remain Afloat on Troubled Waters

TIME: " ... the question is how long Barnes & Noble can stay ahead of the gradual shift from print to digital. Barnes & Noble still has 705 bookstores in the U.S., and those locations are less profitable than they used to be, though that drop seems to be slowing. Worse, its online operation continues to lose money. Overall, Barnes & Noble's profits in its most recent quarter, which ended in January, fell 25% from a year earlier to $60.6 million. In order to stem the losses, Barnes & Noble's executives decided recently to stop paying stockholders a dividend and invest the money in its online and e-books division to boost growth."

Dealtalk: Barnes & Noble auction gets case of writer's block

Reuters: "Barnes & Noble Inc's (BKS.N) efforts to find a buyer have slowed to a crawl, erasing recent gains in its stock price, as potential suitors question the bookseller's ability to compete against formidable rivals. ... "

Seven IT Lessons From The Borders Collapse

IDG : "We've all heard -- endlessly -- why Borders went bankrupt. But those things are just technology. What are the IT lessons? ... "

Publishers Look Beyond Bookstores

Coming to a bait and tackle shop near you. NY Times: " ... Publishers have stocked books in nonbook retailers for decades — a coffee-table book in the home department, a novelty book in Urban Outfitters. In the last year, though, some publishers have increased their efforts as the two largest bookstore chains have changed course. Barnes & Noble has been devoting more floor space for displays of e-readers, games and educational toys. Borders, after filing for bankruptcy protection in February, has begun liquidating some 200 of its superstores. ... "

E-commerce drives Q3 growth for Barnes & Noble

- Web accounted for 89.3%—$150 million—of all growth in the latest quarter, per Internet Retailer.

Barnes & Noble 3Q net income falls

Yahoo! Finance: "NEW YORK (AP) -- Book seller Barnes & Noble's third-quarter revenue rose, but its net income fell 25 despite higher revenue as it continued to invest in its online operations and Nook e-readers, the company said Tuesday. Barnes & Noble also said it was suspending its quarterly dividend, and it doesn't plan to forecast its fourth-quarter or full-year earnings due to the effect of last week's bankruptcy filing by Borders Group."

Books Beyond Borders

Megan McArdle, The Atlantic: "At least Barnes and Noble should be happy; this erases their biggest competition for bricks-and-mortar pure brick retailing. But looking to the future, they too have to be nervous. All that real estate is expensive, and their margins are under pressure from Wal-Mart on the bricks-and-mortar side, and Amazon on the web. One wonders if the Nook can really make up for those competitive disadvantages."