The Looming Collapse of Barnes and Noble


The Looming Collapse of Barnes and Noble
In recent weeks, I’ve been grousing about returns and their sudden increase at the end of last year. Now, I have a much better understanding of what happened. Barnes & Noble saw comparable store sales plummet over 9% in their stores last year — and experienced a subsequent 7.5% drop in revenue in the next quarter. Nook sales were down 25% in the same period. Not many retailers can take a hit like this and survive for long. Another bad year and the end is near.
We live in one of the most economically vibrant areas in the northeast, yet our Sears was being torn down last week — as was the KMart. HH Gregg was closing its doors, as were a number of other retailers. If anything is clear, brick and mortar retail is suffering — and Barnes and Noble, as great as their stores are, is no exception. (The chart above shows the declines have been ongoing for 4+years.)
Several years ago, not soon after we rebooted Sunbury Press in 2010, Borders Books — an author/independent – friendly chain went out of business. It took with it a number of small to medium-sized publishers who could not absorb the deluge of returns and lost revenue. Barnes is a much larger retailer than Borders ever was.  If they would suddenly close up shop, the effect on the publishing industry would be devastating to all but the strongest players.
At Sunbury Press, we have already started taking action to batten-down the hatches before this storm even hits.  We have greatly limited the number of new titles automatically receiving return privileges. Some of you have asked about this. At this point in time, it is essential we reduce our exposure to returns from a failing BN. At Sunbury Press, we believe our exposure is the equivalent to one year’s sales sitting in stores that could boomerang back. If, suddenly, several 18 wheelers showed up at the farm with hundreds of pallets of returned books, we’d be out of business – bankrupt.  Fortunately, this exposure drops over time, as we do not add to it.  This is our goal — to mitigate our risk.
Does this mean the book trade is failing?  No.  In fact, book sales overall increased last year.  Online sales are up and sales at independents are up. Here’s the problem with independents, though.  While we absolutely love to support independent bookstores, we can’t tell the distributors to only accept returns from them and not Barnes.  So, please tell your independents to order directly from us, and will accept returns.