This holiday season could be the most crucial one of Barnes & Noble‘s history.
Its sales have been in a decline for six years as the bookseller cedes market share to Amazon and consumers turn to their phones or portable tablets instead of books. There’s been a revolving door in the retailer’s C-suite, and activist investors have piled on. Now, Barnes & Noble is considering a sale of its business after receiving interest from a handful of parties, including its so-called modern-day founder and executive chairman, Leonard Riggio, and reportedly, U.K. retailer W.H. Smith.
Barnes & Noble must prove it can deliver sales growth in its core book business this holiday season. The retail industry as a whole is expected to benefit from strong consumer spending, with the average American household expected to spend $1,536 through the holidays, according to a survey by Deloitte. That’s up 25 percent from a year ago. If Barnes & Noble can’t grow sales against such a healthy, economic backdrop, the company could ultimately head down the same path as its former rival Borders, or shuttered Toys R Us or Sears, which is in bankruptcy court.
All things considered, Barnes & Noble is feeling “highly anxious” and somewhat “paranoid” this holiday season, Riggio told CNBC.
“We’ve done a lot of things this year to try to put ourselves on the right track and to get our comp-store sales number to head in the positive direction, … and we are hoping that that comes — we are planning for it to come — during this holiday season.”
The company will report its fiscal second-quarter earnings on Nov. 20, where it could say more about expectations for its holiday quarter. In September, without giving a specific range, Barnes & Noble said it expected “improving sales trends, positive comps during the holiday period, better gross margins, and continued expense reductions” for the remainder of the year. Analysts surveyed by Refinitiv predict same-store sales for fiscal second quarter will be down 1.75 percent, but then moderate in the holiday quarter, its fiscal third quarter ending Jan. 19, to drop only 0.25 percent.
Last holiday season, the bookseller’s sales tumbled more than 6 percent, with e-commerce sales also in the red. After the dismal results, the company slashed its staff.
In a new ad campaign that’s being rolled out this week in movie theaters and on cable television, Barnes & Noble touts its more than 20,000 current employees, along with their knowledge of books, as reasons why its stores are unique. “Nobody Knows Books Like We Do” is the message of the campaign, which will run though the middle of January.
Barnes & Noble also will be testing roughly 10 to 15 store layouts during the holidays, featuring different spreads of merchandise, to see what sticks.
“We have a lot of things out there in test form,” Riggio told CNBC. “Retail is all about that. … If you’re smart, you conduct tests during the holiday season, and that informs you how to run the next holiday.”
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