Book buyers continued to defect from Barnes & Noble (bks) during the crucial holiday season, dealing the chain a big new blow to its financial results.
Barnes & Noble shares fell 15% on Friday in the wake of the bookseller’s report that comparable sales fell 6.4% in November and December, the busiest time of year for the retailer, as shopper visits continued to decline. What’s more, half of the deterioration in sales was attributable to drops in music and DVDs, two categories that have been in a long decline across the industry but remained fixtures at Barnes & Noble.
And in yet more evidence of how much difficult Barnes & Noble is having carving out a niche for itself in the current environment, its online sales fell 4.5%, making it a rare retailer to see its e-commerce business contract. All this comes at a time arch-rival Amazon.com (amzn) has been opening more bookstores.
The company said in November it would exit some gift and toy products, gradually shrink its store size and focus more on books. But even there, Barnes & Noble, the top U.S. bookstore chain with 632 stores, is struggling: its book sales fell 4.5%, underperforming the overall book market.
Barnes & Noble said in a press release it “remains focused on executing its strategic turnaround plan,” which includes cost cuts. That plan includes some test stores with cafes and that sell alcohol that are showing promising results but that frankly are too few in number to move the needle anytime soon.
Chief Executive Demos Parneros, who took the reins last year after multiple changes in the corner office in recent years, has been making small modest moves so far. They include things like giving customers who bought a book a coupon to get a discount on a coffee at its café. Another is to encourage its booksellers to engage with customers, something that should go without saying for a bookstore if it wants to give customers a reason to go to its stores.
But none of this is so far adding up to a cohesive strategy to pull Barnes & Noble out of its long downward spiral, now up to seven quarters of comparable sales declines, at a time shoppers are increasingly learning to look elsewhere for their book buying needs.