The impact the coronavirus can have on physical stores was illustrated by the release of first quarter results by Barnes & Noble Education. For the quarter ended August 1, sales in B&NE’s retail segment dropped 42.2% from the comparable period a year ago, falling to $158.8 million. In the period, comparable store sales fell 42.8%, which B&NE said accounted for $106.6 million in lost revenue.
B&NE operated 772 physical outlets in the quarter and 670 virtual stores. The company noted that since the majority of its campus stores were closed during the quarter, sales of digital textbooks increased, as did online sales of general merchandise, which includes clothing and food.
While online sales of general merchandise nearly doubled over last year and accounted for 55% of total general merchandise sales compared to 9% a year ago, the increase was not nearly enough to counter the loss of its in-store business. To mitigate the impact of the sales decline in its stores, B&NE has reduced expenses by $26.8 million through furloughs and other cost reduction initiatives.
In prepared remarks, Michael Huseby, B&NE CEO and chairman, said the company continues to upgrade its digital platforms and offerings. "While our first quarter performance was significantly impacted by Covid-19 related campus store closures, the strategic investments we have made to transform BNED’s platforms and offerings to digital, enabled us to pivot quickly and offer flexible solutions to our campus partners," he said. "In particular, with the increased emphasis on digital learning this summer, we saw strong growth in the demand for our bartleby self-study offerings, which experienced increases in subscribers, revenue and traffic. We also leveraged our custom store solutions, virtual bookstore, and digital offerings to provide course materials to students utilizing remote learning."
Huseby did not offer any predictions on how the crucial back-to-school season will play out. "We have worked closely with our campus partners over the past few months as they have had to make many difficult, yet necessary decisions regarding their campus reopening plans," he said in a statement. "Whether they bring students back to campus, implement remote learning or a hybrid model, as a result of the investments we have made, we have never been better positioned to serve them through our stores, eCommerce and digital offerings."
Total revenue for the company fell 36% in the quarter, to $204 million. The net loss rose to $46.7 million, from $32 million, in the first quarter of fiscal 2020.