At Barnes & Noble, chief operating officer Jaime Carey has been promoted to president of development & restaurant group, effective immediately, and will be in charge of real estate development and the newly created restaurant group. Carey joined B&N in 2003 as director of newsstand. In 2008, he was promoted to chief merchandising officer and last year he was named COO.
CEO Ron Boire said, "Jaime's promotion underscores the importance of having a leader devoted to our new store concepts with a focus on an enhanced restaurant experience."
The company has said it will open four new concept stores during the current fiscal year, which began May 1. The first will open in Eastchester, N.Y., in October. The others will open in time for the holidays and will be located at the Edina Galleria in Edina, Minn., the Palladio in Folsom, Calif., and One Loudoun in Loudoun, Va. The stores will have table-service restaurants offering beer and wine. B&N has partnered with the Branstetter Group and AvroKO, restaurant consultants, to help design the spaces and menus.
In another B&N executive change, Michael Ladd has been appointed v-p, stores, effective June 27. Ladd has had a 24-year career at Sears, beginning as store manager and most recently senior v-p, head of retail stores. Boire, who came to B&N last year from Sears, called Ladd "an accomplished leader with a proven track record for driving results. We think he is the perfect addition to our management team given his broad range of retail capabilities."
Wall Street reacted well to B&N's fourth quarter report, issued late Wednesday afternoon: yesterday B&N shares rose 7.9%, to $11.26 a share.
In an extensive presentation-conference call (via seekingalpha.com) with analysts yesterday, B&N executives discussed a range of plans and the state of business. Among the many striking parts:
The new concept stores will be about 20%-25% smaller than B&N's typical superstores, but have "lots of chairs, tables, places for people to sit, hang out--together, alone, however they would enjoy the space," as Carey said. The stores will also have more display tables to emphasize book discovery. The company predicts that books will consist of 60% of revenue in the new stores. "Books are the soul of the company and they are what is the core of what differentiates us," Boire said. Carey added: "Books remain the hero."
Where possible, the new concept stores will have outdoor space. Boire noted that the Eastchester store is "beautiful, including outdoor seating, things like a fire pit and bocce court, just a great community space."
The restaurants at new stores will have "a focus on hospitality [that] will further reinforce Barnes & Noble as a destination and a place where people come to spend time and unwind," Boire said. The company plans to introduce some of the new offerings at existing cafés.
In the new stores, a new app will provide a store map and allow customers to check out the store, create a wish list, find books, etc. B&N booksellers will have tablets to use on the sales floor.
Young readers titles, for ages 8 through 12, are the No. 2 "sales driver" at B&N, second to adult trade fiction.
Sales of graphic novels and manga have grown steadily during the past 10 years, and in the past year, B&N doubled the space allocated to those titles.
Coloring books for adults have been a hot category at B&N for the past year and a half, and the company expects that to continue. But instead of waiting "for the trend to die," as chief merchandising officer Mary Amicucci put it, the company is starting to introduce customers "to new mediums. Because we think it started with coloring, but really it became a form of creative expression."
Music sales are up to almost 2% of total store sales at B&N, a gain that's attributable to the vinyl revival. The company expects significant growth in this area again this year.
Gift sales represent 7% of stores' revenue, up significantly because of sales related to the coloring book craze. This year, B&N is opening For the Artist shops in 200 of its 640 stores, providing a range of artist supplies, including media for coloring, illustration, chalk drawing, painting, cartooning and journaling.
B&N closed eight stores last year, the fewest store closures in 16 years. Carey said that "98% of our stores are cash flow positive on a four-wall basis," and that leases are relatively short, with almost 500 up for renewal in the next four years.
The six million members of the company's loyalty program are skewing younger, and have relatively high levels of education and higher incomes. Members pay $25 annually, and receive a 40% discount on bestselling hardcovers and 10% of most other items in stores; online members receive free express shipping.
B&N has more than 30 million customers, sells a million unique book titles annually and hosts more than 100,000 events a year. B&N estimates that print books account for about 85% of the U.S. book market and that its share is about 20% of print books and 9% of e-books.
Boire said there is "an emerging trend of returning to physical ownership and physical experience, which I call digital blowback, in which people want to own and touch a physical object, whether it be a beautiful, artistic book cover or a great album jacket and a piece of vinyl."
At times, Boire sounded like an independent bookseller, as when he said, "Our stores are typically where customers' journey begin and are great places for community learning and discovery, which cannot be replicated by an algorithm. As retail faces greater competition from e-commerce and digital alternatives, we will continue to make our stores more experiential and differentiated. Our stores as a destination and centers of the community is at our core."