Life is full of mundane little pleasures that, while probably not existentially important in the grand scheme of things, nevertheless make life a little bit better.
One of those pleasures for me—and one that’s very easy to take for granted—is heading to my local Barnes & Noble bookstore for a couple of hours every now and then. I don’t do that as frequently as I once did, mind you. Life with three young children doesn’t offer as many big, empty blocks of time begging to be filled. But I still zip in when I can, peruse new releases, browse the magazine section, maybe have a cup of coffee and relax for a bit.
And, more often than not, I walk out with a magazine or book. I’m a reader. I like things in print. And I like having the option to actually walk into a store and buy those things. In print. It’s not an option that I want to see go away, even if it’s not an option that I exercise quite as often these days.
Alas, I may not have much to say about it when it comes to Barnes & Noble’s fate, which is looking more and more dire these days.
As we’ve seen first with music stores, then with video rental stores such as Blockbuster and Hollywood Video, bookstores are the latest media outlet to struggle mightily in the Internet age. Borders was shuttered back and 2011, but at least book lovers could console themselves with the knowledge that there was still Barnes & Noble. Now its outlook is cloudy at best.
Three years ago, the media conglomerate Liberty Media acquired a 17% stake in the bookseller for $204 million. Liberty Media chairman John C. Malone said of his company’s gamble, “It would be a bit of a flier for us, on whether Barnes & Noble can play competitively with the likes of Apple and Amazon in the digital transformation.” Apparently, that question has been answered. In early April, after three years in which losses ranged from about $60 million to $157.8 million, Liberty decided that the brick-and-mortar bookseller was a bad investment and dumped all but 2% of its holdings.
Barnes & Noble executives have already announced plans to close about 20 of its 600 stores annually for the next 10 years. But other evidence suggests things may not drag out that long, at least in their present form. One proverbial canary in the coal mine is more telling. In mid-April, Barnes & Noble chairman Leonard Riggio disclosed that he had reduced his personal stock stake in the company from 30% to 20% over the past five months. “This is not a growth company,” he said in an interview regarding the stock sales. Shares fell 12% the next day.
Riggio also told The Wall Street Journal, “In my mind, the story isn’t written as to where this is all going.” But to my mind, it doesn’t take a Harvard business degree to suggest that when a company’s leader starts dumping its stocks, the writing may very well indeed be on the wall.
Analyst James McQuivey told The Wall Street Journal that, in the newspaper’s words, “he is hard pressed to name any traditional companies selling physical media that have shown revenue growth since consumers warmed to digital books, movies and music.” McQuivey summarized Barnes & Noble’s questionable outlook by adding, “If Barnes & Noble is in its current form by 2015, I’ll be very surprised.”
Personally, I don’t spend a lot of time obsessing over retailers’ profit and loss statements. But in this particular case, I would be more than a little melancholy to see Barnes & Noble go the way of Borders, Circuit City and so many other retailers that have failed to weather the Internet’s digital onslaught. A world without big bookstores seems somehow a smaller, more impoverished place—a world in which the possibility of perusing the marketplace of ideas in a real, physical space is no longer an option.
And at the risk of sounding like an old-fashioned technophobe, that seems like a cruel fate to me indeed.
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