In an effort to distinguish itself from its main competition, Barnes
& Noble has developed a new strategic plan that has been the focus
of intense deliberations at the company since Borders Group announced
its own new strategic plan 10 days ago. The goal of B&N's plan
is to free it from reliance on its U.S. superstores by taking advantage of "unanticipated
market opportunities," as a company statement put it.
For one, B&N, which once owned a minority stake in the old
Chapters chain in Canada and scouted locations in the U.K., has decided
to take the international plunge. Again it is looking at the British
market, where some established locations that generally fit the B&N
model are available at favorable rates. The company is also considering
purchasing similar locations in Ireland, Australia and New Zealand.
While B&N noted that the weak U.S. dollar will present certain
hurdles to starting in business abroad, it did emphasize that in the
future, remittances to New York will be in strong currencies like the
pound sterling. Any confusion caused by Australia and New Zealand's use
of the word dollar for their currencies will be cleared up early on,
B&N assured investors.
There will be major changes in B&N's domestic operations, too.
Although the company has closed many of its B. Dalton Bookseller mall
stores during the past decade, the company said that it now sees
renewed opportunities in this area and will both expand its Dalton
operations by opening new branches as well as through "the acquisition
of existing mall bookstores that can be easily adapted to the
Dalton format."
In another significant strategic move, B&N plans to have "an
established third party" handle its online bookselling operations. The
company stated that it believes its expertise lies in selling books in
a bricks-and-mortar environment. It also has grown tired of collecting
sales tax on online purchases.
In yet another major change, B&N has decided to abandon its
proprietary publishing program. Effective immediately, the company is
suspending the publication of new titles and will order no reprints on
existing titles--and let them go out of print. "We are a retailer first
and foremost," B&N stated. "It follows that we want to work in
close partnership with our suppliers and not compete with them."
B&N is also putting its Sterling Publishing subsidiary on the block. The company said it has already received strong interest from another leading bookselling company.
In related news, B&N said that considering that the
company's sales at stores open at least a year dropped 0.3% during the
past fiscal year, chairman Leonard Riggio and CEO Stephen Riggio have
insisted on taking a salary of just $1 a year each and forgoing stock-award
bonuses until comp-store sales grow at a rate of at least 2%. At the request of the
Riggios, their new salaries
will be paid in cash.