In April 2016, Barnes & Noble founder and chairman Len Riggio announced his intention to retire that September. That plan fell apart four months later, when Riggio returned to the B&N helm after CEO Ron Boire was fired following the poor results for the quarter ended July 30, 2016, which were attributed in part to mistakes by Boire, including unprecedented inventory reductions and cutting retail floor personnel.
In 2017 when Demos Parneros was promoted from chief operating officer to CEO, Riggio stepped aside as CEO once again, only to return in July 2018 when Parneros was fired. “I wasn’t happy about coming back the first time,” Riggio said in a recent interview at Barnes & Noble’s New York City headquarters. “But this time I am very happy to be here. We have a lot of work that needs to get done, and I think I bring the necessary leadership.”
Riggio said that he, and the board, have full confidence in the management team, despite assertions made in a lawsuit filed by Parneros seeking severance payments. Given the approaching holiday season and the recent distractions caused by Parneros’s termination, Riggio said now is not the right time to bring in a new CEO. He disputed the notion that B&N has been hurt by instability over the past few years, noting that, in addition to himself, a number of executives have been with the company for a long period—and, more importantly, a large number of store managers are B&N veterans.
Riggio admitted that the sales shortfall in the most recent quarter, which ended July 29, was “unnerving,” but added, “People have been rising to the challenge” to prepare for what he admits is a very important holiday season. During the conference call discussing the results for the quarter, CFO Allen Lindstrom said B&N expects to post an increase in comparable store sales in the holiday quarter, following a string of declines. Riggio remains confident B&N will achieve that goal, noting that comparable store sales continue to rise for toys and games and a remade gifts section, and that he expects to see better results from B&N’s cafés.
But B&N remains a bookstore at heart, Riggio said, and he believes better merchandising, coherent pricing, and better use of BN.com will create an improved retail experience for B&N shoppers. He noted that Reputation Institute recently ranked B&N as the country’s most reputable retailer (with Amazon ranked second). So though nonbook items are important to B&N, Riggio said he doesn’t want to do anything that will take away from the company’s reputation as a premier bookseller. (Several times in the past, Riggio has rejected the suggestion that B&N should become more like Canada’s Indigo, which sees itself as a cultural department store. He said that type of move “is not in our DNA.”)
After the holidays, B&N’s focus will be creating the store of the future. The company opened its first prototype store in Columbia, Md., on September 19, and three more are set to open in 2018: the outlet in Melody Farms, Ill., will open October 3; a B&N in Hackensack, N.J., will open on or about November 7; and a store in Staten Island, N.Y., is set to open around November 14.
The Columbia store is 17,000 sq. ft. and will stock 35,000 titles; it features contemporary design touches, including warm-hued oak bookshelves and USB and electricity ports at tables in the café area. At the center of the store are two large “book theaters,” which offer customers a 360-degree in-the-round browsing experience. Booksellers at the store will be equipped with tablet computers to facilitate customer service. The store will also feature self-service kiosks that assist customers with locating books.
Riggio said B&N expects to learn something new from each outlet, and he hopes to have a final prototype ready in 12–18 months. The current prototypes will vary in size depending on location. Riggio speculated that stores in urban areas—where rents are high—will be approximately 14,000–17,000 sq. ft. size, but that outlets in suburban and rural areas could very well be closer to 26,000 sq. ft. The smaller the store, the higher the ratio of books to other products in the inventory mix, he added.
And for all the problems that getting involved with the Nook has caused B&N, Riggio said he thinks that the digital reading device can remain part of the company, noting that it is important to many of B&N’s customers. He said that when e-book sales started to take off, he was convinced “everything would be digital.” He had an idea to put books, video games (he owned GameStop at the time), and educational materials (via B&N College Stores) on the same platform, but the company didn’t have the resources to carry that out.
After B&N settles on the right store prototype, it will likely be the responsibility of the next CEO to determine how new stores are rolled out. “I am only speaking now about creating the prototype,” Riggio said, indicating that the expansion of B&N’s physical footprint will be up to someone else. He has a somewhat open mind when it comes to choosing the next boss, although he doesn’t agree with those in the publishing industry who believe that the next CEO must have book experience.
“The essential requirement for a successful retailer is to be able to identify the right locations for the company’s stores,” Riggio said. Who that next CEO ought to be will become apparent over time, but for right now, he added, “I am the one in the chair.”