Barnes and Noble fired CEO Ron Boire last week, claiming that he was not a suitable fit for the company. The nations largest bookseller has begun the process of finding their third CEO in less than three years. The lack of leadership will set the company back almost six months, as new executives will replace existing ones. This entire situation could not come at a worse time, as major publishers are gearing up for the most lucrative time of the year, the match towards Christmas.
The firing of Boire has industry insiders scratching their heads. He has a big vision for the company, which he outlined on June 23 during a two-hour investor presentation in which he was joined by other B&N executives. During that meeting, B&N reiterated its intention to continue to downsize its Nook business, upgrade e-commerce site and open four new concept stores, the first of which is set to open in October in Eastchester, N.Y. The centerpiece of the new stores will be an expanded café that will serve “American-style fare” plus beer and wine.
I dig the fact that Barnes and Noble is investing in upgrading their retail stores, but I really have to wonder if beer, wine and hot food will be bringing in people who are going to be buying books. B&N executives are being very cagey on what the concept stores will entail and how it will bring in new customers.
When Ron Boire was first appointing to being the CEO, I was very skeptical. He did not come from a modern tech background and did not have book selling experience. When it was first announced that he was going to be the incoming CEO, I proclaimed that he would kill the Nook. During his short reign he closed down the Nook digital bookstore in the United Kingdom, scrapped the Nook App Store and Nook Video Store and closed down their R&D center in Santa Clara. The Nook is not officially dead yet, but it is on life support.
One of the big reasons why the Nook has been gutted and is in utterly deplorable shape is primarily due to the Boire appointed executive Fred Argir. Fred was the chief digital officer at Toys R Us and prior to that, he was Chief Information Officer at The Sports Authority based in Denver, CO, where he led the organization through a formal web redesign, incrementally increasing page conversion through a focus on improved usability and experience. He also served as a consultant to Best Buy and before that Target. Needless to say, Fred has zero experience with e-readers, tablets and developing apps, nor does he have any idea on how to compete against Amazon.
Speaking of Amazon, earlier this year Argir spoke at the Digital Book World conference in New York and stated “My win percentage on predicting what Amazon is going to do is very low,” he said in a Q&A with conference chair Mike Shatzkin. “They’re going to do whatever they want to do.” In effect, he is not paying attention to what his primary competition is doing, which is why Kobo has become the dominant number two player in the e-book arena, while Nook continues to lose ground to Apple and Google.
B&N’s revenue for the fiscal year ended April 2016 fell 3.1% compared to fiscal 2015, and the company had a net loss of $24.4 million, those results were about in line with expectations. The company even touted that the eight stores it closed in fiscal 2016 were the fewest closures in 16 years. Nook revenue continues to flounder and there seems to be no clear, concise plan, to remedy the situation. It seems as though the people in charge of the Nook simply see it as a job and not a calling. Everyone who is in charge of e-book departments at Apple, Amazon, Kobo and Google frequently evangelize the format and constantly hype it at international publishing events, while B&N simply buries their heads in the sand. When new e-readers or tablets are launched, they are events. Amazon invites press from all over the United States to get some hands on experience, Kobo has a big party in Toronto and Apple, well, we all know how they promote their events. Barnes and Noble does nothing to promote anything, one day a new product is announced and it’s immediately in their stores. They don’t have events, they don’t send products to bloggers or newspaper companies.
I wish the people in charge of Nook loved the product and wanted it to do well. Barnes and Noble has all of the potential in the world to quickly turn things around, but sadly they are just running in circles, while they constantly lose market share.