Barnes & Noble ($BKS), the largest book retailer in the United States, isn’t doing so hot. Thanks in part to Amazon and other online booksellers, the retail chain faced some pretty hard times in the last decade. They’ve closed down stores, seen a decline in sales, and lost the eBook war as sales of their Nook devices took a nosedive. (Conversely, Amazon’s Kindle eBook device gobbled up most of the Nook’s remaining market share.
To combat the loss of foot traffic and sales, Barnes & Noble has been experimenting with some interesting concepts. In some markets, the company started opening new stores to include less books, more gift items, and upscale dining options within the store. Existing stores started stocking more toys and collectibles to increase visits from sci-fi, fantasy, and comic-book fans. A handful of Barnes & Noble locations even sell vinyl records, which are becoming increasingly more popular with music fans.
Regardless of how B&N attempts to woo in new customers, their sales are still in a decline. Recently, however, the company revealed a direct cause of the continued sales decline…and it’s unlike anything we’ve ever heard before.
Barnes & Noble recently announced that they suffered another less-than-stellar holiday quarter.
She company’s sales fell 8.3% when compared to the year before. This figure comes at a time when physical books are more in demand than before, and eBook sales are steadily decreasing. Regardless of how B&N changes their strategy, their sales are still lacking. After announcing this decline, their stock price took a dip as well. It’s currently down 8.59% as of this writing.
The New York-based retail chain blames lackluster sales on waning interest in adult coloring books.
Coloring books for adults (primarily senior citizens) became a major fad in the last couple of years. Barnes & Noble caught on early and started prominently featuring these books and all forms of coloring instruments (pencils, crayons, markets, etc.). Unfortunately, interest in adult coloring books is not what it used to be, though I can speak from personal experience that my grandmother still enjoys coloring nature scenes while watching the news.
The company also blamed the sales dip on the lack of high-profile album releases.
Barnes & Noble locations also stock CDs and home video formats. Most stores conveniently placing them near checkout lines for last-minute impulse purchases. Unfortunately, the company feels that blockbuster album releases (like the name-checked 25 from Adele) were noticeably absent in the latter half of the year. This left impulse shoppers and music fans to avoid buying CDs during their trip to the store.
Barnes & Noble has an online storefront, but it’s certainly not growing at an exponential rate.
Sales on BN.com increase 2.2% despite a major relaunch last year. While you can still get cheaper books on their site than in B&N stores, many people are still going to Amazon.com first. The company’s Nook devices and eBook sales aren’t doing well, either, as that part of their business decreased by 25.7%.
Should you invest in Barnes & Noble? While the company’s efforts to revamp stores, focus on non-book items, and promote their website are noble efforts, they’re not making a meaningful impact on the company’s bottom line. More people are simply going to Amazon or elsewhere for the same items, but for a lower price. There’s also the simple fact that retail is down right now, as numerous retailers are closing their doors by the hundreds.
If you think that Barnes & Noble will do something right and they can’t possibly go out of business because they’re America’s only bookstore, be sure to do your research first before you invest. If you think things are looking grim for the company and retail as a whole, you might want to look elsewhere.