Holiday sales for the nine-week period ended December 28 fell 6.6% at Barnes & Noble’s retail segment and tumbled 60.5% in its Nook division. The sales decline in the retail division, which consists of B&N’s trade stores plus BN.com, was attributed to a 5.5% drop in comparable store sales as well as store closures. What B&N terms "core” bookstore comps--which exclude sales of Nook products--dipped 0.2%. Total sales in the retail division were $1.1 billion in the holiday period with the juvenile, gift, and toys & games categories the strongest performers.
Mitch Klipper, CEO of the retail group, told PW that books in general did "very well" during the holidays. He attributed the solid retail performance to an advertising campaign that was successful in pointing to B&N as a place to do holiday shoping plus "flawless executiion" by the company's 40,000 booksellers led by an experienced executive team. "I couldn't be happier with our execution," Klipper said. The company operated 674 retail stores during the holidays.
The decline in the Nook group was due to a combination of drops in both hardware and content sales, though sales of devices fared the worst, dropping 66.7% over the holidays to $88.7 million. Newly-named B&N CEO Mike Huseby noted that last year Nook sales were led by the introduction of new tablet devices while in the 2013 holiday season the focus was on selling through existing inventory and promoting sales of the new Glowlight. "We were in a very different position in 2013 compared to 2012," Huseby said, adding that, overall he was "happy with what happened in the Nook division." The failure of Nook device sales to meet expectations in the 2012 holiday season eventually led to the departure of then CEO William Lynch and caused B&N to significantly scale back its plans in the device market.
Sales of digital content fell 27.3%, to $36.5 million, due to lower device unit sales and lower average selling prices. B&N has been counting on digital sales to drive revenue in the future and Huseby called sales of digital content "the lifeblood of the digital business." He said B&N is doing a better job of getting Nook owners--the company has sold over 10 million devices--to buy content through their Nooks and is making progress on linking its Nook e-bookstore to other devices, including Microsoft.
