As the new CEO of Barnes & Noble, Demos Parneros knows his top priority is to stop the sales slide that has plagued the company’s retail stores. Between fiscal 2014 and 2016, sales through the stores fell 6.2%, and they are sure to fall again in the fiscal year ending April 30, 2017. In the first nine months of the current fiscal year, revenue was down 6%. And in a particularly disappointing third quarter (ended Jan. 28, 2017), retail revenue was 7.5% lower than a year ago and comparable store sales were 8.3% lower.
Parneros said the major factor in the sales decline through the bricks-and-mortar stores has been a drop in customer traffic, something that has hurt many other retailers. “All our other metrics are okay,” Parneros said. “People love the brand.”
His early focus will be getting the B&N team to explore ways to drive more people into the stores. Some of that will involve using lessons learned from the three concept stores that B&N has opened since last fall, which feature large cafes that sell beer and wine. Parneros said that while the complete concept store may not be able to be transferred to other outlets, he views the three stores as a great learning platform that can be used to study such things as traffic patterns and section performance. Parneros noted that sections such as gifts and educational toys and games, which have been opened in all B&N outlets, have performed well and can be used to contribute to the company’s sales turnaround.
Parneros also acknowledged that some existing stores have aged and may be too large for today’s bookselling environment. Since about 100 leases per year are coming up for renewal in the next few years, B&N will have a number of choices regarding its bricks-and-mortar portfolio, he said.
Parneros said he will continue B&N’s omnichannel approach to bookselling, but suggested that could undergo some changes. “Different retailers have different definitions of what omnichannel means,” he said. But B&N will remain committed to offering its customers e-books through the Nook. “Selling e-books is an important part of the end-to-end value proposition that we offer customers,” he said.
Parneros took over the reins of B&N from company founder Len Riggio. Riggio, who will remain chairman, had been serving as interim CEO since Ron Boire was dismissed last summer after less than one year on the job.
Barnes & Noble Retail Revenue
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