Some of the biggest news to hit the bookselling world this week is that Barnes & Noble suddenly fired 1,800 of its most experienced workers on Monday. Every Barnes & Noble store lost between 3 and 7 employees—cashiers, digital leads, receiving managers, and others. The store announced it would book a charge of $11 million for severance costs and related expenses, but expects to save $40 million per year.
Not only did this firing come without warning, with employees only learning about it when they showed up for their shifts, but it came after months of Barnes & Noble assuring said employees that they weren’t going to do this sort of thing. Tumblr blogger “audreyii-fic” has a lengthy rant about the matter, pointing out that, among other things, this cost-cutting to save $40 million per year comes after paying nearly $15 million to its last two revolving-door CEOs.
audreyii-fic attributes the latest cost-cutting matters to a desire to boost cash on hand in order to look good to stockholders. The CNBC piece I link in the first paragraph quotes a B&N spokeswoman blaming the need to pare staff back on poor holiday performance—but audreyii-fic notes that the poor holiday performance has at its root similar cost-cutting measures that decreased staffing over the holiday season.
In particular, hours in receiving were carved to the bone. You know what that means? It means that product – product that could be selling – sat unopened in boxes. In many cases, those boxes had already been logged into the system. The computers showed we had them. Customers came in, expecting to purchase things, knowing they were in the store! But what they wanted was buried under 100, 200 boxes. And there were no employees to find them. There were barely any employees available at all.
Customers went away annoyed. And they shopped on Amazon instead.
Because, well, why not?
audreyii-fic also points to Barnes & Noble’s recent ship-from-store initiative as another harbinger of Barnes & Noble’s coming doom. The program took workers off the sales floor where they could have been helping customers, and took items away from the stores’ inventories—and the stores didn’t even get credit for the sales. So, the stores appeared to be losing sales, providing convenient justification for cutting their staffing further.
This is a decision that is only made if the executive level of a company is no longer interested in helping their business. This is a decision that is made only if the executive level has decided the company is dying, and don’t care if they hasten along the demise as long as they can harvest the organs for themselves and leave everyone else with the shriveled husk.
And this comes at the same time as B&N announces the appointment of another executive: Tim Mantel as Chief Merchandising Officer. If you listen closely, you can hear the playing of a sad violin over the crackling fire…
This piece from Business Insider comparing the New York locations of the Amazon Store and Barnes & Noble provides an interesting illustration of the problems B&N is having. Writer Mark Matousek calls Amazon’s store sparse and minimalist, says that it “feels like it was created by an algorithm,” and “it’s a better environment for taking Instagram photos than reading or chatting with a friend.” Barnes & Noble, by comparison, is more welcoming, but sells too many non-book items, its checkout line “looks like a dollar store,” and “the grab-bag inventory strategy makes the store seem confused and desperate.” Matousek concludes that he would still rather shop in a B&N, but “Amazon Books more likely resembles the future of chain retail.”
The comparison is obvious between this pre-Valentine’s Day massacre and what happened to Circuit City a few years back. Circuit City fired its highest-paid employees in an attempt to cut costs, and ended up going out of business 19 months later as the lack of those experienced employees led to considerably fewer sales from the inexperienced, underpaid staff who remained. On The Digital Reader, Nate Hoffelder doubts the store has even 12 months of life remaining.
If Barnes & Noble—effectively the only national bookstore chain still doing business—goes the way of Borders, the bookselling landscape is going to look remarkably different. Will Amazon suddenly stop deeply discounting the books it sells once it no longer has its chief competitor? Will a regional bookstore chain like Books-a-Million step up to fill the vacant ecological niche?
And what will the major publishers do? They’ve got a strong interest in making sure there continue to be paper-book stores around to allow customers to browse, discover, and fondle the merchandise in person. They can’t be happy about the prospect of the only major remaining chain going away. Given how badly (and baldly) they’ve tried to prop up the paper book business at the expense of the ebook market over the years, might they also try to step in to try to keep B&N in business somehow?
But then again, they can’t have missed noticing the problem B&N has been having with its executive leadership and business strategies. It wouldn’t do any good to try to prop them up if they’d only blow it again.
Something tells me that, one way or another, the book and ebook market is going to look very different in a year or so. It remains to be seen how this will turn out, but I’ll certainly be watching closely.
I have no insight into the dollar figures necessary to pull it off and whether it’s even possible, but considering the Big Five’s dependence on B&N to showcase and sell their products, it seems like they should consider some kind of consortium strategy to buy out B&N as its stock price inevitably crashes, in order to reorganize and preserve it.
It wouldn’t even need to be profitable per se. It would only need to lose less than the Big Five make by doing so, and create an overall net positive ROI.
The alternative seems to end up even more at the mercy of Amazon as the main retailer of print books, an inherently disadvantageous situation, as Amazon’s priorities seem so radically different from the publishers’
According to AuthorEarnings, B&N sells about 24% of print books, Amazon not quite double that, and those numbers are from two years ago. B&N has probably dropped below 20% of print sales by now. Publishers are having their own profit problems, they don’t need another albatross around their necks. Their money is probably better spent on Amazon placement fees. You HAVE noticed that most front page Amazon recommendations are Big 5, haven’t you?
Yeah, but I see that as bowing to the inevitable rather than liking it. I think they’d much rather sell by channels other than Amazon. B&N is probably the biggest single channel other than Amazon. Losing B&N will only increase their dependency on Amazon, which (I believe) they still view is less than optimal.