January 28 , 2013

Barnes & Noble looks to close a third of its stores nationwide

Barnes & Noble looks to close a third of its stores nationwide

DBJ: Jan 28, 2013, 10:34am CST UPDATED: Jan 28, 2013, 12:24pm CST

Barnes & Noble could close some of its North Texas stores, as it announces it plans to shutter a third of its stores over the next decade.

Candace Carlisle

As more shoppers flock to the web for their book purchases, Barnes & Noble Inc. (NYSE: BKS) could close a third of the 689 retail stores it operates throughout the country.

That reflects some major challenges that New York City-based Barnes & Noble — which has 20 retail stores in North Texas — has faced in recent years, said Steve Lieberman, CEO ofThe Retail Connection, a Dallas-based retail real estate firm.

"They have some opportunities, but some real serious challenges," Lieberman said. "Their sales are way down and all retail has got to learn how to develop a bricks-and-clicks strategy. The strategies — online and in the store — have to become seamless."

Other big box retailers, such as Best Buy and Borders, have been facing similar issues. Over the past few years, customers have begun using these retailers as showrooms, but more and more turn to the web to make their purchase.

In the past decade, the bookseller has closed about 15 stores per year, said Mary Ellen Keating, a Barnes & Noble spokeswoman.

"Of that number some of the stores are unprofitable while others are relocations to better properties," Keating said, in an email Monday. Barnes & Noble opened two new prototype stores in 2012 and plans to continue opening new prototypes this year.

"Barnes & Noble has great real estate in prime locations and the company's management is fully committed to the retail concept for the long term," Keating said.

Barnes & Noble has a huge competitor in Seattle-based, which has had a huge advantage because it hasn't historically been paying state sales tax on its online purchases, Lieberman said. That has given the ability to expand quickly online.

Borders closed its bookselling operations in 2011, a victim of the popular e-books that offer instant gratification to readers.

The whole bookselling business has been impacted by this trend, said Bob Young, a managing director at The Weitzman Group, a Dallas-based retail real estate firm.

"Barnes & Noble has been able to weather the storm partly because they have been able to generate success with the Nook, but there are certain categories of retailers that are susceptible and at risk by consumers moving to the Internet."

Should Barnes & Noble close a third of its stores in North Texas, the region could have six or seven fewer bookstores. No one knows how Barnes & Noble will choose the stores it closes, Lieberman said.

"There are so many elements in that decision," he said. "You could close redundant locations, or close stores that are not profitable. There's no black or white answer."