New Stores Will Have To Do With Half the Size; Existing Shop Square Footage Will be Edited Down
Significant horror category author Stephen King and bookseller Barnes & & Noble owe a lot to each other’s success, and possibly Barnes & & Noble is now taking a cue from King’s writing wisdom when it pertains to running their shops.
“When your story is prepared for reword, cut it to the bone. Get rid of every ounce of excess fat. This is going to hurt; revising a story to the bare fundamentals is always a little like killing children, however it should be done.” – Stephen King
Following disappointing quarterly outcomes this year and a reorganization plan that has actually called for trimming $40 million a year in expenses, Barnes & & Noble is now ready to reword its store plans and it requires cutting excess fat.
The bookseller’s next chapter requires opening substantially smaller sized stores and cutting existing shop space as leases turn up for renewal.
The business has actually reported weakening exact same shop sales in 4 of the last 5 years and again this quarter. Last week, President Demos Parneros reported even poorer results: a fiscal 2018 net loss of $125.5 million compared to net incomes of $22 million the year prior to.
In his revenues conference call, Parneros laid out a plan to go back to profitability with a real estate reword a key theme.
“Another method we prepare to rebuild sales is through improvements to our realty portfolio. We’re excited to open numerous brand-new model stores this year, which will include a totally brand-new design,” Parneros stated. “We see a great deal of opportunity for the smaller and more flexible model and as a result will be net store positive this fiscal year.”
The company runs 630 book shops with 16.6 million square feet of space under the Barnes & & Noble Booksellers trade name with a total typical shop size of 26,000 square feet. All however one are rented.
The brand-new store size moving forward will be significantly smaller – 14,000 square feet typically.
“We are delighted to be launching early fall with the very first among these stores and we plan to get terrific learning and takeaways from these,” Parneros stated.
While that effort gets underway, the bookseller will likewise be looking at downsizing its existing stores as leases turn up for renewal. The business has about 250 lease expirations coming upon expiration dates by the end of 2020– 40 percent of its portfolio– most of them already in renewal duration options.
“So, while we have an excellent store that’s making an excellent four-wall revenue, we’ll try and downsize the square video of it and be more effective,” Parneros stated. “That’s the instructions.”
The first space it prepares to cut is square footage committed to music and videos, which makes up as much as 8,000 square feet in a few of existing stores. Shop equivalent sales for music and DVDs was reported to be down by “double-digit” figures.
“We can’t downsize all of those stores, but where we can, we will scale down those shops and when we do, we will offer much less space, if any, to those categories,” Parneros stated. “It’s a bit of a slower process that we ‘d like. We ‘d like to do it over night, but trying to be sensible with usage of our capital and our expense dollars where we’re moving and where we’ve reallocated space, we’ve seen the results.”