Sunday, January 29, 2012

Why the question now is when and not if Barnes and Noble will file for bankruptcy

In the last couple of years I started thinking B&N might file for bankruptcy because they have no strategy to transform their brick and mortar stores from a liability back to an asset. Now, after reading Julie Bosman's article 'The Bookstore’s Last Stand' on the New York Times, I'm more positive about it than ever.

Unfortunately after reading this article, I'm afraid the realistic question we need to ask is when B&N will go bankrupt and no if they'll actually do it. Here are five quotes from the article that will explain why:

1. "Mr. Lynch says Barnes & Noble stores will endure. The idea that devices like the Nook, Kindle and Apple iPad will make bookstores obsolete is nonsense, he says." - It's a 3-page article, yet you won't find there a word of explanation from CEO Lynch why its nonsense and how he plans to save his stores.

2. "For all the bells and whistles and high-minded talk, Barnes & Noble doesn’t exactly have the cool factor (or money) of, say, a Google or a Facebook." - Say no more. Do you really believe B&N can out-innovate Amazon and Apple with their very limited resources? I doubt that.

3. "Carolyn Reidy, president and chief executive of Simon & Schuster, says the biggest challenge is to give people a reason to step into Barnes & Noble stores in the first place. “They have figured out how to use the store to sell e-books," she said of the company. "Now, hopefully, we can figure out how to make that go full circle and see how the e-books can sell the print books.”" - She is right and I guess she also knows B&N haven't provided yet any good reason for most readers to step into their stores. I can only wonder if she believes they'll actually find a way to do it.

4. "And yet, in three years, he (William Lynch, CEO, B&N) has won a remarkable number of fans in the upper echelons of the book world. Most publishers in New York can’t say enough good things about him: smart, creative, tech-savvy — the list goes on." - It's definitely great to have a nice guy at the top of the pyramid, but with no answers on how to transform the stores back from a liability to an asset and with little vision on how to keep B&N in business, not to mention relatively poor results, Lynch needs less fans and more people that will tell you what he's doing wrong and how to fix it.

5. "No one expects Barnes & Noble to disappear overnight. The worry is that it might slowly wither as more readers embrace e-books." - two years ago no one in the media would even speculate such a thing. Now it has became a reasonable assumption, which shows you how high the probability that B&N will file for bankruptcy is.

To learn more on our B&N index series visit Barnes and Noble Bankruptcy Index on our website.

You can find more resources on the future of bookstores on our website at

Raz @ Eco-Libris

Eco-Libris: Working to green the book industry!