Barnes & Noble's disappointing holiday sales have not diminished the retailer's resolve to get its bricks-and mortar stores on firm ground, CEO Len Riggio told PW in an interview last week, following the announcement that comparable store sales fell 9.1% in the nine-week period ended December 31, 2016.
For the fiscal year ending in April, Riggio said B&N still plans to close a total of 12 outlets while opening four. In fiscal 2018, he expects B&N to be "store positive." Riggio attributed the weak holiday results largely to a decline in customer traffic that affected many retailers for much of 2016. Riggio observed that with traffic down for many retailers, it was difficult for an individual store to build sales momentum on its own.
Riggio was widely quoted as predicting that store traffic would improve after the presidential election, but he acknowledged that this did not occur. "People were not in a celebratory mood," Riggio said. In the four days following the close of the holiday period, sales and traffic did improve, but Riggio admitted it was hard to draw too many conclusions from such a small sample. Still, he still expects customer traffic to rebound at some point in the new year. "People will be looking to move on with their lives," he said.
In terms of what was selling at B&N, Riggio said the chain had positive comps for sales of the top 30 bestsellers, and improved its market share among the top 100 selling books. Declines came in children's products, gifts, and music. (Adele's album last year was the biggest selling CD in B&N history, and drew lots of people into the store, Riggio said).
The company's new test stores, the first of which opened in late fall, have done well, Riggio said, and the company has learned a lot. "We've gleaned some things we will be able to use in other stores," Riggio said, adding that B&N remains flexible in developing a new prototype for its stores.
With more sales moving online, Riggio said he was encouraged by the performance of BN.com, which had a 2% gain over the holidays. He acknowledged that the company had a hard time improving the consumer experience of the site, but believes the newest version is much more consumer friendly. "We finally saw an uptick [in sales] at BN.com. It has finally been debugged," Riggio said. "We have plenty of room for growth."
Despite the poor holiday sales, Riggio reiterated that earnings for the full fiscal year will be up over fiscal 2016, and that the company has a strong balance sheet. In a final note of optimism, Riggio noted that for the next holiday season, "we will be facing much easier comps."
