Why did Barnes & Noble just fire CEO Demos Parneros?
The only things I’m seeing in CNN or the LA Times are that he committed “unspecified violations of company policy.” Whatever it was, B&N said a law firm recommended that move. Parneros won’t get any severance (a big change from previous CEOs who’ve gotten millions of dollars in golden parachutes), and will be removed from the board immediately. The only further details available are that it didn’t have to do with anything pertaining to finance or fraud.
Perhaps the strangest thing about all this is that, just a few days ago, Parneros was riding high on the 4th quarter B&N shareholder earnings call, waxing just as optimistic as he did last year, and discussing B&N’s future plans for cutting costs, redesigning stores, and running its new book club. And yet, suddenly it comes out that he’s not going to be around to oversee those changes—someone just opened a trap door underneath him in the boardroom floor.
Why did Parneros get canned so suddenly without a penny in severance? “Unspecified violations of company policy” leaves an awful lot of wiggle room. Did Parneros check Facebook too often on company time? Perhaps he was a little too free with the key to the executive washroom? Was he caught using a (gasp) Kindle?
But seriously, if advice from lawyers was involved, and it wasn’t something involving finance or fraud, it could only have been some impending scandal with the potential to give B&N a huge black eye if it came out while Parneros was still in the driver’s seat. And if this is the sort of thing that could take Parneros from zero to fired in less than a week, it must be pretty darned serious. Sexual harassment, perhaps?
Maybe it was even something they already knew was about to hit the news in a matter of days or hours, as someone goes public with allegations. If something like that was in the offing, the only way B&N could have controlled the damage would have been to act the instant they got any warning, so when it did come out they could say, “Yes, and that’s why we threw the bum out as soon as we knew.”
In any event, Demos Parneros only made it about 15 months after being promoted to CEO in April of 2017. Nate Hoffelder’s words about signing up to be the B&N CEO on a specific date are starting to ring truer than ever.
Is this move going to have any impact on the long-term survivability of Barnes & Noble? Who knows? It’s not as if any of the string of CEOs the B&N board apparently dug out of the bottom of cereal boxes has done much in the way of stemming the bleed-out. Some of the recent measures, such as the firing of 1,800 experienced employees back in February, seem all but designed to accelerate it.
Forbes’s Larry Light seems to think that Barnes & Noble is “too important to fail,” given that its collapse would mean publishers lose their last nationwide chain bookstore. He thinks that an impending collapse would prompt swift action to save it by those publishers and others whose business might be affected by the lack of a good Amazon competitor. It’s a nice sentiment, but I’m not so sure. Those publishers didn’t exactly step up to save Borders when it went under. And the toy companies—who also need physical stores to display their wares in person, possibly even more than bookstores do—turned a blind eye to the impending demise of Toys’R’Us, which just had its last day in business. Is B&N going to stay in business just because everybody really really wants it to?
In any case, while I wait to find out what’s going to become of B&N, I’m going to set a Google News alert for any further reports on Demos Parneros…and maybe make myself some popcorn. If something is about to hit the fan, it should at least make for some interesting schadenfreude.
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