Commentary: Barnes & Noble should not be dedicating floor space to Doris Day CDs
Customer traffic continues to weaken, and sales are down. Within this dynamic, books are holding up slightly better, but non-book sales are in sharp decline. Some of this is down to the fact that many Barnes & Noble stores, especially older ones, are a hodgepodge of product with seemingly little coordination and thought given to ranging. As much as it is sensible to stock things like toys and games, there are lots of other places that sell these items — often at lower prices. In essence, B&N needs to refine its non-book offer and work harder to create differentiation.
A key example of this is back to school. While B&N did make an effort with its books offer, its non-book selection and merchandising was below par and could have, and should have, been much more inspirational to encourage impulse buys and cross-purchasing. In this regard, we sometimes get the impression that B&N is just not very commercial.
B&N has tried to stimulate footfall into stores with the use of cafes and places to relax. However, we find these to be rather lackluster, and in some stores, the environment is not particularly enticing. In essence, the company needs to up its game if it is to pull in shoppers. This includes reallocating floorspace from categories like CDs — where dedicating space to Doris Day albums is both unnecessary and unproductive — to functions that are more aligned with what consumers want.
Looking ahead, we believe that B&N will continue to make progress in reducing expenses. However, we remain far less optimistic about the sales line. While B&N is testing new store layouts and formats, these will take time to filter through the chain. The year ahead looks like another one of slipping back.
Yes DORIS DAY belongs in Barnes and Noble and is probably the most perfect Vocalist ever; just ask Brian May from QUEEN "A Grammy Salute To Music Legends" available at Barnes and Noble. Doris Day is a Grammy Lifetime Achievement Award winner plus 3 Hall of Fame. Her Recording history is unparalleled for a female vocalist. 76 Charted Hits, 21 Singles in the top 10, 7 number 1, Her top Charted Albums include one at number 1 for 17 weeks. If these are not a reason enough to belong in Barnes and Noble please listen to DORIS Sing a pure sensual beautiful perfect pitch voice no Pro Tools, a natural work of Art. DORIS DAY is a gift to all of us who choose to pick up any of her CDs at Barnes and Noble.
NRF revises 2017 sales growth forecast
The National Retail Federation on Wednesday has lowered its annual retail sales forecast, citing government data revisions.
Retail sales for 2017 are now expected to increase between 3.2% and 3.8%, down from the 3.7% – 4.2% growth the NRF predicted earlier this year. The revision comes after the Census Bureau lowered its retail sales figures, and the Bureau of Economic Analysis downgraded its personal income and consumption figures.
“While weaker-than-expected spending in the first quarter along with decelerating inflation has also contributed to the revision, NRF anticipates stronger sales heading into the fall and holiday seasons," said NRF chief economist Jack Kleinhenz.
Kleinhenz noted that total retail sales have grown year-over-year every month since November 2009, and retail sales as calculated by NRF — which excludes automobiles, gasoline stations and restaurants — have increased year-over-year in all but one month since the beginning of 2010.
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Toys ‘R’ Us hires firm to help it explore options
Toys "R" Us' debt may have finally caught up with it.
With $400 million in debt coming due in 2018, Toys "R" Us is bringing in advisors to help the retailer weigh its options, which could include filing for bankruptcy protection. The nation's largest specialty toy retailer has hired Kirkland & Ellis, a law firm that specializes in corporate restructurings.
"As we previously discussed on our company's first quarter earnings call, Toys "R" Us is evaluating a range of alternatives to address our 2018 debt maturities, which may include the possibility of obtaining additional financing," Toys "R" Us spokeswoman Amy von Walter said in a statement
Toys "R" Us has been burdened with a heavy debt load since 2005, when it was purchased by private equity investors KKR, Bain Capital, and Vornado Realty Trust in a $7.5 billion buyout. The chain previously announced it is working with Lazard to help address its debt load, and it successfully refinanced some of its debt last year.
"While the decision of Toys R Us to appoint restructuring advisors is not necessarily a sign that bankruptcy is imminent, it is an indication that the company is in a very uncomfortable financial position," commented Neil Saunders, managing director of GlobalData Retail. "For a robust retailer, debt payments can be challenging. For a retailer struggling to generate sales growth while, at the same time, trying to invest to remain relevant — it can be the difference between success and failure."
Saunders noted that Toys "R" Us is challenged on many fronts, including that it suffers competition from online and physical "generalists" who discount toys to drive customer traffic, and that its large stores are "increasingly unsuited to what consumers want and expect."
"Against this backdrop, Toys “R” Us has to contend with the debt it accumulated as part of the leveraged buyout," Saunders said. "In our view, this is an example of private equity damaging retailers by not running them as commercial trading entities but as ATMs."
in June, Toys "R" Us posted a net loss of $164 million for its first quarter, up from a loss of $126 million a year earlier. Same-store sales fell 4.1%.
Toys "R" Us will report its second quarter earnings on Sept. 26.
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