Santa delivered coal to Barnes & Noble Inc.’s stocking this holiday.
The bookstore chain says that while online sales rose 2% during the nine-week period encompassing November and December, comparable-store sales overall were down 9.1% from a year ago. Barnes & Noble factors online sales into the comparable-store sales figures.
The retailer released no sales dollar figures when it issued an update to its guidance for the fiscal year today. It now says it expects fiscal 2017 consolidated earnings of $200 million before interest, taxes, depreciation and amortization are factored in, and comparable-store sales to decline 6%. In November, the company anticipated earnings in the $200-$250 million range and a comparable store sales decline in the “low single digits.”
Barnes & Noble attributes the decline to lower traffic and fewer sales in categories that were hot sellers during the 2015 holiday season, including coloring books and art supplies. BarnesandNoble.com is No. 54 in the 2016 Top 500 Guide, and Internet Retailer estimates its web sales declined nearly 15% in 2015.
Barnes & Noble’s comparable-store sales have been flat or declining since 2013. It has reduced its store count by 35 since 2013 and operated 640 stores as of April 30, the close of its 2016 fiscal year. The average store size is 26,000 square feet and the retailer has been making an effort to expand its in-store merchandise assortment to non-core categories, including toys and games and gift items. In fiscal 2016 Barnes & Noble generated $48.4 million in sales in these categories, an increase of 4.2% year over year, and the only product categories that had year-over-year gains.
The bookstore chain’s holiday review comes the same day Amazon.com Inc. (No. 1 in the Top 500) confirmed it will open a bookstore in Barnes & Noble’s hometown of New York City. Amazon says it will open its first physical bookstore in New York this spring. The store will be in the Shops at Columbus Circle, located at the southwest corner of Central Park. Barnes & Noble has five stores in Manhattan.
84.7% of all the money spent on books, music and video in the United States in 2015 was spent online with Top 500-ranked e-retailers, according to an Internet Retailer analysis, up from 71.9% in 2014. The books/music/video category is the retail category where the greatest share of sales have moved online. Office supplies, at 49.4% of 2015 retail sales, is the next largest category in terms of category share where sales have moved online.
Amazon has been slowly moving into bricks-and-mortar retailing over the past 14 months. It opened its first bookstore in Seattle in November 2015 and has since opened locations in Portland, Ore., and San Diego. The e-retailer also has bookstores in Chicago and suburban Boston in the works. Amazon currently is testing Amazon Go, a convenience store that eschews traditional checkout lanes for a sensor-filled stores connecting to a smartphone app, in Seattle.