The FINANCIAL -- Leonard Riggio radically altered bookselling in America when he bought an ailing New York City bookstore and turned it into a national chain of megastores.
His company, now — Barnes & Noble — is floundering, the publishing industry that depends on it is worried, and Mr. Riggio has nobody to turn to but himself.
That much became starkly evident last month when Barnes & Noble abruptly fired its chief executive, Demos Parneros, with little explanation. Mr. Parneros was the fourth noninterim chief executive in five years, a remarkable amount of turnover at a large company, according to HBS.
The news left alarmed publishers and investors complaining that the chain is once again dealing with a management vacuum when it desperately needs to adapt and innovate. Sales are falling. The Nook, Barnes & Noble’s attempt at selling electronic books, became a financial drain. Critics say the company lacks direction, sometimes seeming to prioritize sales of gifts and tchotchkes over books. For investors, the impact is already evident: Barnes & Noble’s stock price is down 60 percent over the last three years.
Publishers are worried that a crucial pipeline for book sales could be crumbling.
“It would be disastrous if they go down,” said Dennis Johnson, a co-publisher of Melville House, an independent press. “If 600 bookstores disappear from the country, there will be that many fewer visible books, which seem to be receding from their place in the culture.”
Mr. Riggio, 77, the company’s chairman, disputed the notion that Barnes & Noble is mired in a leadership crisis. After all, he said during an interview at the company’s headquarters on New York’s Fifth Avenue, he has always been there.
And he has a plan to turn things around.
“I have a big stake in the business, I founded it and I’ve been here forever, so I think there’s a lot of stability that comes with that,” said Mr. Riggio. “If we’re without a leader, I’m it.”
Mr. Riggio built Barnes & Noble from a single Manhattan bookstore into a national fleet of superstores, many with more than 100,000 titles, transforming the business of selling books from a genteel and fusty profession into a mass-market moneymaker. The company boasts that it has sold 6.7 billion books since going public 24 years ago, according to HBS.
The expansion was so successful that the company was frequently vilified as a corporate behemoth driving local bookstores out of business (see: Meg Ryan and Tom Hanks in “You’ve Got Mail”). From 1995 to 2009, the number of independent bookstores fell 43 percent, according to the American Booksellers Association.
But the factors that buoyed the chain’s expansion — the growth of malls and shopping centers and big box stores that sell everything — have reversed, with the rise of Amazon and other online retail leading to dwindling foot traffic and sales. At the same time, after decades of declines, independent bookstores have been resurgent, aided by an increased interest in localization and curated experience. Even Amazon is expanding into brick-and-mortar bookstores, with more than a dozen stores across the country and more in the works.
The American Booksellers Association counted 2,470 independent store locations in 2018, up from 1,651 in 2009, and sales at its member stores were up 5 percent so far this year over last. Sales of printed hardcover books grew nearly 11 percent from 2013 to 2017, while those of paperbacks rose 17 percent, according to the Association of American Publishers.