Are Barnes and Nobles Going Out of Business?

Barnes and Nobles is one of the largest booksellers with at least 1300 or more bookstores in over 40 states as well as over 600 located on some of the most popular college campuses. That was the scoop April 2011. How did a bookstore such as Barnes and Nobles become so popular over the years? It is because they do not just sell a variety of interesting books, but they also give you access to magazines, newspapers and other content.

Not to mention, all of it is available across a distribution platform that is multi-channeled. The company has developed software and content products that are digital as well as a couple of ecommerce websites. The business of Barnes and Nobles is focused on providing trade book sales through their store or website. Some of these trade books include mass market paperbacks such as science fiction and mystery novels, e-readers, children’s books, educational toys & games, music and other digital content.

It sounds like Barnes and Nobles is doing quite well so, what is all this talk about them closing the doors? According to the New York Times, Barnes and Noble has found themselves developing a device called a Nook (e-Reader) to keep their profitability as more and more readers grasp onto the concept of books and magazines that are digital. Just before the company developed this device, they found themselves losing almost a fifth of their stocks value.

Even now with the invention of the Nook, many online retailers and discount stores like Amazon seem to put up a fight that Barnes and Nobles cannot win. However, the company has commented that since the development of Nook products, their sales have went up at least 65-70% compared to a year earlier. This is more than double, and they expect their sales for the fiscal year of 2012 to be around $400 million or more.

The CEO of the company, William Lynch believes that the Nook is not getting the attention and respect that it deserves, so they are looking for a number of options as to how they can shine more light onto this part of the business. However, Lynch does comment that oversees, the Nook business is expected to expand and they should bring in over 1.5 billion in revenue this year.

While this could leave Barnes and Nobles stores fighting for their lives, there are some who expressed some skepticism in the separation of the Nook and Barnes Nobles such as Michael Norris, a senior trade analyst. He comments that people who invest in e-books also enjoy purchasing paperbacks sometimes. Yet, should we look at the fact that Barnes and Nobles was getting ready to sell itself last year until Liberty Media decided to make a $204 million investment in the company?

The fact is that Barnes and Nobles continues to lose money as more and more people are turned toward e-books may mean that it is time to say goodbye to the stores and focus completely on the Nook or find away to work the stores and the Nook together so that they do not lose any more money.