last recession ? when did the recession end ? i go to B&N every nite, in a very affluent surburban area; the store is completely empty there are more employees than customers that is the absolute truth
Barnes & Noble will likely go the route of Borders - bankrupt in the next recession...High costs & brick-n-mortor -
a comment onthe Motley Fool Article ....
"The author appears to have done superficial work on BKS at best. This presents an excellent situation for patient value investors as reality is far different than perception resulting in a very cheap stock.
To claim that things at BKS look bad and are getting worse is a gross misstatement of actual events and indicates an inability to look past the headlines and see what is really happening.
If you have one business that is losing money - say $500M - and one business that is making money - say $300M - the net is a loss of $200M. However, if the money losing business goes away, then you are left with a pretty good business.
That is the situation at BKS. NOOK will be separated from the core business within the next 3 years. Meanwhile, the core business has been growing EBITDA at mid teen levels over the last few years. Is the core business in decline? Yes. However, it still produces gobs of cash flow, and the fact that the chairman and founders owns a TON of stock means that he is incentivized to plow that cash flow into buybacks once NOOK is separated. the result is that BKS will be worth $30-35 in 2-3 years."
"The core Barnes retail and college bookstores have declining revenues, in the high single-digits. But with cost cuts, they still churn out about $400m in annual cash flow. The Nook division losses for the first three quarters of fiscal 2014 were $160m, but that had improved substantially as Barnes focused on costs and clearing out existing inventory. The shares trade at about $20, they are up 50 per cent for the year and are fairly valued. Barnes hasn’t turned round yet – but is no emergency, either."
Those aren't bums. They are poets and philosophers enjoying the B&N intellectual environment as
they focus on their next great work.
"The government should subsidize them because they really serve a purpose."
Never going to happen...
but, if you want to hold BKS's head under water so it can catch it's breath, getting the government involved should do it!
Remember Solyndra, the Silicon Valley startup that collapsed, leaving taxpayers liable for $535 million in federal guarantees? Just let BKS sort things out on their own...
"I know business"
You may, but I don't think you're at all familiar with demographics.
Most of the "Generation Y" group have not [to my understanding] been BKS's stock in trade. Do you know who is?
Right! The baby boomers; they are the book-aholics, They are BKS's bread-and-butter...the other groups may be using their Kindle's or reading from their pc's and laptops. I don't know.
The few times I've gone into a BKS store, I see young mom's or seniors. Not many teens and 20's...unless they are coming in for a latte or a Mocha Frappuccino.
I'm not a Starbuck's fan...I had to look that up. ;-)
They should charge admission. Its a great place to go when you have no place to go. Its better than a mall, better for you than a bar, and with towns cutting library hours due to budget cuts it helps fill the void. The government should subsidize them because they really serve a purpose. Without barnes people will stay home and watch more reality garbage.
You know, a long time ago [back in the 1980's] COSTCO Warehouse had a receptacle on the handlebar of every shopping cart. You had to place $.25 in the receptacle to get a cart...they were linked by a CHAIN to the cart next to the one you needed to use.
Anyone old enough to remember that?
This was to help with the returning of ALL shopping carts to their stall...if you wanted your two-bits back, you had to return the cart to the stall. They finally got rid of the "nuisance" and people just began returning their carts to the rightful place after they used them.
The point is the "pay-for-use" idea was a PIA and people complained.
Whether you visit a N&N in Manhattan or any large city where the "disenfranchised" take up seats, people will---eventually---vote with their money. They will buy books over the Internet [I do] or use their Kindle's or find some other venue to get the books they wish to read.
In San Diego, the B&N's I visited had no vagrant problems anywhere. I can certainly understand how B&N is such a pariah, though...and it's NOT for the unwelcome clientele'.
How can a business survive when you permit people to come into your store, pick up a cup of coffee and a danish, furnish them with a comfy easy chair to sit in ALL DAY, give them free, access to 1,000's of books and require nothing more from them than payment for the food and drink they consume?
I love books, yet most of the books I have interest in I can find on the Internet anyway...
Charging "admission" is NOT going to work, for the same reason the COSTCO fiasco did NOT work. First, it adds to the overhead and secondly, people don't care for the hassle. They won't do it; you'll drive the few people that you do have coming into the B&N store away---to the Internet.
A "security guard" won't work for the same reason.
You'll have to have to think of something else, miklisco