September 14, 2016
Almost a month after firing CEO Ron Boire, B&N posts dramatic 6-point loss in the first quarter of 2016
by Simon Reichley
Things have been quiet on the Barnes-and-Noble-is-on-fire beat lately. So let’s do a little catching up!
During our Moby hiatus last month, the national book chain fired nearly-new CEO Ron Boire, on account of his poor “fit” with the company. At the time, it seemed like a shocking rebuke of Boire’s ambitious plans for expansion, and a somewhat puzzling decision, given the short time the man had spent at the helm.
Just last week, during the company’s quarterly earnings call, it was revealed that revenue at the retail giant was down almost 7 percent from the same span in 2015. Which goes a long way to explaining why Boire is looking for work.
None of the numbers are good, but most disturbing is the 6% drop in same-store revenues, or comp sales — a measure sales data from active stores, which excludes those losses that can be attributed to store closings. This is not good news if a big part of your plan was to close stores and focus on your core interests.
Regarding the somewhat surprising losses, founder and interim CEO Leonard Riggio is worried about a nigh apocalyptic retail environment, with store traffic “close to a historic low point.”
Bloomberg’s Lauren Coleman-Lochner has an interesting note that puts the massive loss in some sort of perspective: revenue from last quarter was $913.9 million, while analysts had projected about $958.5 million. That projection took into account last year’s also-not-very-good numbers, the turbulence of new leadership, and the implementation of a new, long-term strategy. They missed that target by upwards of $40 million. Yikes.
Riggio and CFO Allen Lindstrom went on to say that an “unprecedented” reduction in stock, as well as reductions in workforce at many Barnes and Noble locations, had exacerbated the already grim situation. These moves were almost certainly part of Boire’s turnaround plan, and seem to have had disastrous results. Riggio promised that these conditions were being remedied immediately, on a store-by-store basis.
No mention was made of The Glossary, which is somewhat disappointing, as we were all rooting for that stroke of true genius to save the day.
Riggio went on to attribute this dismal environment to… you guessed it, The Donald. Well, not quite. What he actually said was, “The current trend can be traced precisely to the current election cycle, which is unprecedented in terms of the fear, anger and frustration being experienced by the public.” Which is just a polite way of saying that Donald Trump a yuuuuuge fucking asshole who is ruining this great country.
Simon Reichley is the Director of Operations and Rights Manager at Melville House.