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About B. Dalton Bookseller, Inc.

Barnes & Noble does business by the book and the NOOK. As one of the largest bookstore chains in the US, it operates some 630 Barnes & Noble superstores, in all 50 states and Washington, DC. Stores range in size from 3,000 sq. ft. to 60,000 sq. ft. and stock between 19,000 and 143,000 book titles. It also sells books and other media online. The company's digital subsidiary, NOOK Media, develops, supports, and creates digital content and products for the digital reading and digital education markets. The struggling company has been restructuring for several years, having spun off its education division, among other initiatives; in 2019 Barnes & Noble announced it would be acquired by private equity firm Elliott Management.

Change in Company Type

In mid-2019 private equity firm Elliott Management agreed to buy Barnes & Noble for about $683 million, including debt. The struggling bookseller had been exploring a possible sale since 2018 as one option to turn the company around. It has been hit hard by competition from Amazon, which owns nearly half the market for new book sales.

Under Elliott's control, newly private Barnes & Noble will have greater flexibility to restructure and make needed investments.

Operations

Barnes & Noble's retail segment (more than 95% of the company's revenue) includes about 630 bookstores under the Barnes & Noble Booksellers trade name. Barnes & Noble bookstores generally offer a dedicated NOOK (digital) area, a comprehensive trade book title base, a café, and departments dedicated to Juvenile, Toys & Games, DVDs, Music, Music & Vinyl, Gift, Magazine, and Bargain products. The stores also offer a calendar of ongoing events, including author appearances and children's activities.

The retail segment also includes the company's eCommerce website, barnesandnoble.com, and its publishing operation, Sterling Publishing. Sterling has some 15,000 non-fiction trade books and ebooks and also distributes about 1,300 client titles.

The company's NOOK Media segment includes Barnes & Noble's digital business, such as its eBookstore, digital newsstand, and sales of NOOK devices and accessories. The underlying strategy of the NOOK business is to offer customers any digital book, newspaper, or magazine, anytime, on any device. It also offers digital lending services (LendMe).

Geographic Reach

New York-based Barnes & Noble operates its 630 bookstores in all 50 US states and Washington, DC. The company’s four largest geographic markets -- California, Florida, Texas, and New York -- account for about a third of its locations, with California accounting for about 10%. It also owns two distribution centers, one in Monroe Township, New Jersey, and another in Reno, Nevada.

Sales and Marketing

Barnes & Noble distributes its own books, which enables direct purchasing by vendors rather than wholesalers. The Nooks segment acquires book rights from publishers and distributes the ebook content through proprietary and third-party platforms.

The company spent about $28 million on advertising in fiscal 2018, compared to $36 million and $54 million in 2017 and 2016, respectively.

Financial Performance

Barnes & Noble's net sales have consistently and significantly declined since 2012, falling about 50% amid major changes in the book-selling industry. Net income has been up and down during that time with multiple years in the red. 

In fiscal 2018 (ended April 2018), the company reported revenue of $3.7 billion, down 6% from the prior year. Both the Retail and NOOK segments declined, with same-store sales down more than 5% on lower traffic. 

The company had a net loss of $125 million that year, compared to profit of $22 million in fiscal 2017. The results were impacted primarily by a goodwill impairment charge of $134 million related to lower than expected holiday sales in 2017.

Cash at the end of fiscal 2018 was $11 million, a decline of $1 million from the prior year. Cash from operations contributed $37 million to the coffers, while investing activities used $88 million, mainly for capital expenditures. Financing activities added another $49 million as a result of proceeds from credit.

Strategy

To address dynamic changes in the book selling industry (particularly declining retail traffic as a result of Amazon and other factors), Barnes & Noble is trying to transform its business from a store-based model to a multi-channel model centered on its retail stores, Internet, and digital commerce. It also wants to capitalize on the strength of its name and heritage and return the focus to books and the expertise provided by store associates.

In fiscal 2018 the company launched a ship-from-store program for BN.com orders and grew its Membership program base by some half a million customers after implementing enhancements. It also launched the Browsery app, which combines technology with community discussion and recommendations. 

Barnes & Noble has been shrinking its physical footprint, with its store count down from nearly 700 in fiscal 2012 to about 630 in fiscal 2018; it also plans to introduce smaller stores in fiscal 2019 with limited inventory and fewer staff members. 

Amid efforts to turn the company around, Barnes & Noble fired its CEO in the summer of 2018 for a violation of company policies; the former CEO has sued over the dismissal. In October 2018 the company announced a strategic review process, which could result in its sale. 

B. Dalton Bookseller, Inc.

122 5TH AVE FL 2
New York, NY 10011-5634
Phone: 1 (212) 633-3300

Stats

Employer Type: Privately Owned
Director Merchandising And Planning Accessories: Analia Giorgio
Director, Marketing: Jen Kral
Director, Product Management, Mobile Platforms And Emerging Categories: Sebastien Trolez
Employees (This Location): 500
Employees (All Locations): 700

Major Office Locations

New York, NY