FOLLOWING a bankruptcy bloodbath back in January, Barnes & Noble is looking to purchase a beloved longstanding retailer for $3.25 million.
The iconic bookstore has taken action to acquire Books Inc., a 174-year-old brick-and-mortar bookseller in the Bay Area.
Barnes & Noble is taking strides to expand its presence, making a move to acquire a longstanding retailer[/caption]
Barnes & Noble is looking to acquire Books Inc., a 174-year-old bookseller in the Bay Area[/caption]
The bankrupt California-based retailer is now asking for bankruptcy court approval to be scooped up by BI Acquisition Co., LLC, an affiliate of Barnes & Noble, for $3.25 million, per a press release from earlier this month.
Should the acquisition go through this fall, Books Inc. will preserve its independent identity, per the release, with Barnes & Noble confirming that the 174-year-old retailer would continue to operate nine stores.
This includes seven neighborhood locations and two stores in the San Francisco International Airport.
Books Inc., the oldest independent bookstore chain in the Bay Area, filed for bankruptcy earlier this year due to heightened operating costs and shifting consumer preferences pushed by the pandemic, both of which led to major revenue losses.
“This agreement will ensure that Books Inc.’s legacy will continue for the foreseeable future,” said CEO Andy Perham in the release.
“With Barnes & Noble’s deep resources and world-class support, Books Inc. will be able to quickly modernize its operations so we can focus on what we do best: connecting people with books, ideas and each other.”
How does bankruptcy work?
Bankruptcy is a specific legal process that helps companies eliminate debt they can’t repay.
The process allows businesses to start fresh and gain access to new credit.
Supervised by federal courts, bankruptcies allow a company to sell off its assets more easily to pay off creditors, according to Investopedia.
Chapter 11, a common process for companies, is used to restructure a business with the goal of remaining open – even if it means selling off most of the company’s properties.
Chapter 7, on the other hand, sells all of a company’s assets, putting it out of business.
Chapter 15, alternatively, allows for collaboration between American and foreign courts to conduct bankruptcy proceedings with “parties of interest involving more than one country,” per the United States Courts.
Barnes & Noble’s impending purchase of Books Inc. is another of the company’s moves to expand its market presence in recent years.
The iconic bookseller acquired Denver’s Tattered Cover Book Store last July, which was similarly undergoing a Chapter 11 restructuring process.
“Books Inc. has a storied history and wonderful bookstores, and we are very pleased to ensure their continuity,” said James Daunt, Barnes & Noble CEO, in the press release. “We look forward to welcoming the booksellers of Books Inc. to Barnes & Noble.”
BOUND FOR MORE
In addition to acquiring struggling retailers, Barnes & Noble has taken strides to grow its store fleet.
Following years of dropping sales and store shutdowns, the book store giant has reversed the trend and is once again expanding.
The company opened 57 new locations across the country last year and announced plans in April to open 60 additional spots in 2025 in the wake of a period of “strong sales” in established locations.
“The long and the short is that we have grown from 2019, so pre-Covid,” the Barnes & Noble CEO previously told Modern Retail.
“We are hugely up in [the book category]. It’s just been fantastic.”
Barnes & Noble closures
The firm has announced it is closing several locations in 2024.
Barnes & Noble says it’s the largest online book-focused retailer – stocking more than one million titles for immediate delivery in the US.
Its Washington DC location at Catholic University will be closing on May 23. In a statement, the company said all general reading books can be purchased for just $2.
Its Glen Allen, Virginia location – about 13 miles north of Richmond – will shutter earlier this year, it revealed on Facebook. That store’s last day will be on June 23.
However, it isn’t the final chapter for the bookstore in this area, as a new location is already being planned.
The chain said it would close a long-term branch at the Slatten Ranch Shopping Center in Antioch, California, this fall. However, it has also unveiled plans to open a new 21,000-square-foot location in nearby Brentwood.
Bandera Pointe Shopping Center lost its Barnes & Noble outlet in San Antonio. But there are rumors that an alternative site could be opening nearby in the future.
Shoppers in Morrow, Georgia have already lost their local outlet – which shuttered on May 7, bringing to a close three decades of service.
Barnes & Noble announced in March that it was closing its location in Merced, California, about 60 miles northwest of Fresno in the Central Valley, on May 12.
A branch in the Tribeca neighborhood of New York City was shuttered on January 14 after 16 years.
It also closed an outlet in Naperville, Illinois, in January after 25 years. However, there has been good news for book fans, as it also revealed that it was to open a new branch at the Prairie Market Shopping Center in nearby Oswego.
Last February, Barnes & Noble announced it would shutter stores near Sacramento, California, and Paramus, New Jersey.
The company had been struggling through years of competition with online book retailer Amazon, leading speculators to believe the store’s brick-and-mortar footprint was bulky and outdated.
But the store also announced a resurgence of locations, confirming its plans to build ten new storefronts.
Also, it launched a new branch in Jonesboro, Arkansas, on February 7.
This followed the opening of two new locations, in Bridgehampton, New York, and Flower Mound, Texas, late last year.
When Daunt took over as top boss in 2019, Barnes & Noble was struggling significantly, hit with dropping revenue and rampant store closures due to competition from Amazon.
However, the company experienced a major turnaround under his leadership, with Daunt rolling out a new strategy focused on curating books for local customers and boosting the in-store shopping experience.
“The problem wasn’t that physical bookselling didn’t have a valid place,” said the CEO. “The problem was that Barnes & Noble wasn’t running good enough bookstores.”
For example, before Daunt stepped in, publishers would pay the bookstore for prime placement of their books, a practice that ultimately led to high return rates because the shelves were stocked with books that shoppers did not necessarily want to purchase.
Roughly 30% of books were returned to publishers prior to the new CEO’s arrival.
“I mean, it’s a big, big, big, big number. So that’s a bit terrifying,” said Daunt. “But it unlocks a dramatic cost saving on the other side. You don’t have to discount so much, so you’re not constantly just trying to get rid of stuff.”
After Barnes & Noble stopped accepting payments from publishers for in-store promotions, the company’s return rate rate dropped dramatically to just 7% last year.
This has not only saved Barnes & Noble millions in shipping and labor costs, but also drawn in more customers into stores, with average visits per square foot spiking over the last three years, per Placer.ai data.
“The passion and understanding of the category is really important because James Daunt understands books,” Neil Saunders, managing director of GlobalData Retail, told Modern Retail.
“He has an intimate knowledge of how the category works and what the consumer wants.”
Barnes & Noble previously brought back a nostalgic section from the 90’s – but shoppers fumed “get ready to pay ridiculous prices.”
Plus, the company set out to open four new stores – and shoppers will no longer need to travel “over 150 miles” for favorites.
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