While total sales have fallen slightly since the outbreak of the new coronavirus at Barnes & Noble, company CEO James Daunt is confident the bookstore chain can continue to be a profitable venture with one provision—that it is allowed to keep its stores open.
"If the U.S. goes the way of Italy and France, that would be difficult to overcome," Daunt said, referring to the decision in those countries to close down all but essential businesses. To Daunt, books and bookstores should be considered vital businesses. "Books are crucial during this period," Daunt said, noting that they provide both education and diversions for people stuck at home. "People are buying lots of books."
Since the virus outbreak, sales of children's books have been very strong, Daunt said, especially in education-related areas. In fact, sales for the entire core book business are up, although those gains have been offset by a plunge in cafe business and decline in some other non-book areas.
Online sales have also risen dramatically, Daunt said. He noted that in the U.K., Waterstones (for which Daunt is also the CEO) had its biggest online sales day on March 18, and that he expects online sales to keep increasing in the U.S. as well. Even with those gains, however, the online side of the business "could never make up for the loss if all the stores are forced to close," Daunt said.
To date, B&N has closed a few stores, notably in the Bay Area, where there is a strict quarantine in place. In other areas, such as Pennsylvania, there are restrictions on hours, Daunt said. Daunt has no doubt B&N's booksellers have the managerial discipline to keep the stores going. Any employee who feels uncomfortable working can stay home, Daunt said, noting that the retailer had adopted a strict policy that any staff member who feels even the slightest bit sick should remain at home.
In a letter sent to employees earlier in the week, Daunt laid out the different scenarios for the company. B&N has made substantial reductions in cost at its headquarters as a way to preserve positions in stores. But if widespread closures do come, Daunt wrote, "we are obliged to make the hardest of choices."
Daunt added that if a store closes, employees will "first make use of their paid time off." After that, employees with a year or more of service will receive up to two weeks of pay. Staff members who have been with the company for less than six months will be immediately laid off.
"This is a devastating situation in which to find ourselves and we understand the personal impacts of such action," Daunt wrote. "When a closed store is permitted to reopen, we will do so, and we intend to rehire." Speaking to PW, Daunt added: "I want our employees to know the truth about what lies ahead. This is a difficult period for retail, but I know we have the skills to make it through to the other side."
