As part of its new turnaround initiatives, Barnes & Noble will open five prototype stores in the fiscal year that starts in May. The news was delivered by CEO Demos Parneros during a Thursday conference call detailing the retailer's disappointing third quarter results.
The new stores will be about 14,000 sq. ft., making them roughly 12,000 sq. ft. smaller than the chain's typical stores. “Twenty-six thousand square feet is too big,” Parneros said, adding that the current locations "were built a long time ago.” Parneros said the smaller stores will be easier to staff and run and fit better with B&N’s omnichannel sales approach. (The omnichannel approach encourages customers to buy books at the store, online, or on a digital reading device.)
The prototypes will be focused on books, and include a café as well as a curated assortment of nonbook items. While educational toys and games have done well for B&N, categories like music and DVDs (which have sold less well for the retailer) will be scaled back. Stores' gift and stationery offerings will also be refreshed.
The first store will be opened in late summer in Hackensack, N.J., with the additional sites still to be determined.
There are no plans to open any more so-called "kitchen stores," which are larger and feature a small restaurant. (B&N currently has five such stores.) Parneros said book sales at the kitchen stores performed about the same as in its traditional locations. The company was also able to gain some ideas about what food will work best in its cafés.
Another emphasis of B&N’s turnaround plan will be to tie the physical stores closer to BN.com. Parneros has been pleased with B&N’s six-month-old “ship from store” program, in which online orders are fulfilled by bricks and mortar stores. The company will soon add the ability for customers to buy and pay for a book online, then pick up the title at their local store within an hour.
Sales at BN.com fell about 5% in the quarter, but Parneros said B&N didn’t put a lot of marketing muscle behind the online operation, as it worked to stabilize the physical stores. He views BN.com as a giant catalog that can help customers learn what is available at the retailer.
