No Buyers for Barnes & Noble at 60 Cents on Dollar

[marmar]

(Bloomberg) Even with Barnes & Noble Inc. (BKS) selling for 60 cents on the dollar, the cheapest retailer in America still isn’t cheap enough to entice private-equity buyers looking for cash.

The bookseller founded by Leonard Riggio fell 28 percent through yesterday since putting itself up for sale seven months ago, according to data compiled by Bloomberg. Losses accelerated after the New York-based company eliminated its dividend in February, leaving Barnes & Noble at a 15-year low last week. The chain is the only U.S. retailer with a value of more than $500 million trading at a discount to its net assets.

Barnes & Noble retreated 80 percent through yesterday since rising to a record five years ago as Riggio, who bought the bookstore in 1971, fell behind Amazon.com Inc. (AMZN) in selling books over the Internet and starting an electronic reader business. Now, with Barnes & Noble piling money into its Nook reader to compete with the Kindle and Apple Inc. (AAPL)’s iPad and analysts projecting its first loss in a decade, the only buyer left may be Riggio himself as private-equity firms back away after the bankruptcy of Borders Group Inc., according to Wall Street Strategies Inc. in New York.

“There’s not much to like,” said Brian Sozzi, Wall Street Strategies’ retail analyst. “One thing I’ve learned in retail is once the model starts to go against you it’s tough to pull yourself out. Assets on their books are losing value so quickly. Other than Riggio, I don’t know who else would want it.” ............(more)

The complete piece is at: http://www.bloomberg.com/news/2011-03-25/no-private-equity-buyer-for-barnes-noble-at-60-cents-on-dollar-real-m-a.html

[hlthe2b]

1. After they drove out nearly all the independent booksellers...

Drove out the other chain competition, including Borders and Walden's....

Are we now going to see the demise of B&N? I don't see that as good, either.

[JDPriestly]

12. They rather deserve what they are getting.

The specialty bookstore will return. It's a nice place to spend a Saturday afternoon. But -- it needs to have the kinds of books you want, maybe some used books mixed in. The Powell's Books model works. A really small version of it would also work if it had small rooms for clubs to meet, a little coffee area, etc.

There is a really nice, cozy bookstore in La Canada (or near La Canada) in LA. There is also Vroman's in Pasadena. I think they are doing well. They have a less antiseptic atmosphere than B&N or Borders. Somehow the private bookstores are less commercial in feel. It's great to go to a booksigning or a talk by an author, and private stores hold those a lot.

[villager]

2. They became a retailing monoculture (speaking as an author)

...with too much power in the book biz -- to decide the fate of titles on the basis of whether they would carry them or not, even, in some instances, to dictate book covers, etc. (Much as Wal-Mart wants to do with music, etc...)

That said, like Borders, they sometimes represent the *only* bookstore certain towns/neighborhoods have -- what happens when they go under?

[JI7]

4. maybe the indies can start opening up again ?

[CBGLuthier]

5. Like flowers blooming in the spring

Maybe after the great economic collapse local businesses will make a return. Of course they will be operating out of the trunk of their car/homes standing next to a trash can fire to keep warm but hell, a business is a business.

[JI7]

14. i think it can be done but the community has to support it

maybe add in the cafe like those big stores did. do some readings, book club discussions etc.

also let the community know that if they buy from the store the money gets back into their community. it might cost a bit more than if they were to order it online but they are getting in return a shop they can personally look through and even read through some pages before deciding they want to buy. things they can't do online.

combine a used book store section with it where people can donate books also .

[customerserviceguy]

11. People will simply order books online

It's been years since I've done anything but shop the discount rack at a bookstore. They just want too much for something I can pick up way cheaper on Half.com. The dead-tree version of the book is coming to an end, that's just reality, no matter how much sentiment exists for the old-fashioned version of reading material.

[adigal]

3. First they killed the independent bookstores

Then Borders was closing up many shops and now B&N is doing terribly. Way to go, America!! Get rid of schools, libraries and the bookstores, and then you can be stupid and happy, because we will all be stupid.

[rrneck]

6. Scorched earth economics. nt

[Night Crawler]

7. Much like Gutenberg probably put thousands of scribes out

of business, electronic media is changing the delivery systems. I can't remember the last time I bought a "book" let alone a newspaper, magazine, CD, DVD or any "traditional" media, and yet I read more, watch more movies and own more music than I ever have in my 60 + years.

[DainBramaged]

8. Barnes & Noble and Blockbuster killed the Mom & Pop book and video businesses

and now they see the same fate fast approaching.


Couldn't happen to nicer companies.


I will miss spending Sunday mornings walking around the coffee table books and occasionally picking one or two up, but as has the dynamic of reading changed thanks to the E-reader, so too has America's shopping habits.

[yawnmaster]

9. I think they would be out of business anyways, with the ethernet and fast...

delivery, electronically, of movies and books, not to mention fast delivery of hardcopy, if desired.
Just another step in ever-changing society.
Will miss live browsing, but I'm sure many missed feeding the horse when the horse-less carriage took over.

[Monique1]

10. There is a Barnes & Noble across the street

they are always busy but if you have one clerk with 20 in line, yes you are going to lose business.

[Hugabear]

13. Barnes and Noble can die and go to hell, as far as I'm concerned

I've never been able to walk into one without seeing right-wing propaganda on prominent display. That, and the fact that they've practically driven the small mom-and-pop bookstores to the brink of extinction, along with a few regional/national chains like Waldenbooks, Borders, and Books-A-Million.

[girl gone mad]

15. Their model doesn't work anymore.

Their competitive advantage was built on bigger selection. Now you can go to Amazon or Abe to find almost anything you want, way better selection.