As one of the featured speakers at the Association of American Publishers annual meeting held March 8 in New York, Barnes & Noble CEO Len Riggio delivered something of a bookselling history lesson, as well as his vision for the future of the country's biggest bricks and mortar book retailer.
In conversation with Penguin Random House CEO Markus Dohle, who conducted the Q&A, Riggio was clearly someone the audience wants to succeed. (After announcing his plans to retire from B&N in April 2016, he took back control of the company he founded in August of the same year).
Speaking only six days after the release of disappointing third quarter results (in which he said he has yet to find a “magic bullet” to stop B&N's sales slide), Riggio repeated that turning around negative comparable store sales into positive comps at the company is key to its future. Riggio said he thought B&N was on its way to achieving positive comps, but the distraction caused by the presidential election and its aftermath ended the upward momentum.
B&N remains comitted to being a multichannel retailer, Riggio continued, offering customers books through its physical stores and e-commerce website. He said the back end of BN.com, which had had a string of problems, is now “secure,” and the company has a great team of new people who have BN.com on track.
Riggio acknowledged that B&N’s expansion into manufacturing digital devices was a mistake, saying, "we’re not a technology company.” And the Nook unit, which at one point had as many as 1,600 employees, he said is now, after dramatic cuts, at about the right size, selling devices manufactured by third parties, but that carry the Nook name. Riggio said that while Nook is significantly smaller, he still wants B&N to be able to sell customers an e-book if that is what they want. On the topic of online sales versus in-store sales, Riggio noted that B&N does "a huge amount of business” from customers who order books online and then pick them up in a store.
In a reference to Canadian retailer Indigo Books & Music, Riggio said that CEO Heather Reisman has done a great job turning around the company (which posted strong 2016 results), by making the retailer a cultural store. But Riggio said making B&N a cultural department store “is not in our DNA.” He said books, which account for about 80% of B&N's sales, will remain central to the company.
Asked by Dohle what publishers can do to help B&N succeed, Riggio suggested that more heads of houses could visit B&N’s headquarters to explore new ideas. He also advised publishers not to fixate on B&N but, rather, on what their customers want. To this end, he suggested publishers should visit more stores outside of major cities.
The final piece of advice Riggio offered to publishers was to inject new life into the steadily declining mass market paperback business. He said at one point mass market paperbacks outsold hardcovers by a seven-to-one ratio. Riggio said with their low price points, mass market paperbacks are an entry format for many customers.
The meeting, in addition to offering a platform for Riggio to discuss B&N, served as the formal transfer of power from Tom Allen as AAP CEO to Maria Pallante, the former U.S. Register of Copyrights, who was selected to succeed Allen in January. In very brief remarks, Pallante said she will work to articulate the value of publishing to the public and will focus on such key areas as copyright protection, free speech issues, and trade.
