A closed book isn’t much good to anyone. The same could be said of a closed book store. So following news that Barnes & Noble, Inc. (NYSE:BKS) is on a mission to close as many as a third of its bricks-and-mortar retail stores over the next 10 years, many are picking through the fine print for clues if this just might be the start, or end, of something more.
Presently, the book store chain has some 689 locations peppered across the United States. In a decade, the tally will be slashed to some 450-500. The move, CEO Mitchell Klipper maintains, is in response to the growing trend toward digital books, e-readers and online book purchases. The company, he alleges, is evolving.
The news comes on the heels of a lackluster holiday season, which bought no cheer to the struggling company. Sales during the crucial shopping season slumped 11% from a year ago. It’s not just cheap e-books and waning print book sales that are plaguing Barnes & Noble, it’s also some serious competition from behemoths like Amazon.com, Inc. (NASDAQ:AMZN) and Apple Inc. (NASDAQ:AAPL).
For all of 2012, Amazon’s Kindle was the best-selling e-reader on the market, easily trumping Barnes & Noble’s Nook. The Kindle Fire was smoking hot when it debuted in late 2011, affording Amazon nearly 17% of the tablet market with shipments totaling 4.8 million. The user-friendly, inexpensive, just the right size at just the right time device (holiday season) was a coveted alternative to the much pricier Apple iPad. But, it was kind of like comparing smoke to fire. Apple’s iPad was the genuinely hot, on-fire item, and the Kindle was sort of a just smoldering substitute.
Research firm IDC predicts Amazon will attempt to regain market share with the launch on a “new larger-screen device…at a typically aggressive price point.” But playing catch-up to Apple won’t be easy. Apple’s impressive iPad sales helped the tech giant achieve quarterly records for both sales and profits during Q4 of 2012. According to Oppenheimer, iPad sales hit a new milestone, with 22.9 million tablets sold compared to the 15.4 million sold a year earlier. That amounts to more than 1.7 million iPads sold per week, up a whopping 60% from the year-ago quarter.
Meanwhile, sales for Barnes & Noble Nook have stalled and failed to gain much traction in the growing tablet/e-reader arena. Sales for all Nook products slipped both online and in stores over the recent holiday season from the same period a year ago.