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.