Barnes & Noble Opens a New Chapter in Food and Drink
Four new stores will serve beer and wine and full meals in enlarged cafes
A rendering of the dining area planned for Barnes & Noble's new Eastchester, N.Y., store. PHOTO: AVROKO
Barnes & Noble Inc. would like you to raise a glass, literally, if you visit one of the four new stores it is opening within the next year.
During an investor conference on Thursday, the bookseller said the concept stores it’s unveiling in fiscal 2017 will feature cafes offering wine and beer in spaces that will be double the size of its typical cafes.
The retailer is also throwing its hat into the competitive restaurant business, a strategy that some independent booksellers have successfully embraced. In addition to its traditional cafe fare, Barnes & Noble will offer a full breakfast, lunch and dinner menu, together with waiter service at the four new stores.
The expanded cafes are seen as a way to draw more shoppers into the bookstores and keep them there longer. Weak store traffic was a contributing factor in the bookseller’s disappointing fourth-quarterresults reported Wednesday. Comparable-store sales were down 0.8% for the quarter ended April 30, while total quarterly retail sales, which include the stores and the BN.com online business, fell 2.2% to $850 million.
A rendering of the new bar concept for the Eastchester store. PHOTO: AVROKO
“We’re going to offer good food, and because we’re Barnes & Noble it’s going to be affordable, not $50 dinner entrees,” said Chief Executive Ron Boire.
Mr. Boire declined to give more specifics about the menu, although he said the retail chain has hired an executive chef. The first store is expected to open in October in Eastchester, N.Y., in southern Westchester County. The store has an outdoor component, with amenities including a fire pit and bocce court, said Mr. Boire.
The other new stores will be in the Galleria Edina in Edina, Minn.; the Palladio at Broadstone mall in Folsom, Calif.; and One Loudoun, a mixed-use community in Loudoun County, Va. Barnes & Noble expects that, in addition to the Eastchester store, the stores in Minnesota and California will open before Christmas.
“I think the expanded cafes are a very good idea,” said John Tinker,an analyst with Gabelli & Co. “This gets people into the stores to do stuff. It’s also something Amazon can’t do. What we have to see is whether Barnes & Noble can increase its sales and fix its tech issues generally going forward. They have to execute.”
During the investor conference, Barnes & Noble provided more detail about its bookstore business at a time when it has significantly diversified beyond hardcover and paperback books. Today, books generate about 60% of bookstore revenue, while gifts, music, DVDs, toys and games contribute 20% of bookstore revenue combined. The cafe business adds just under 10% of bookstore revenue. The retailer didn’t break out its newsstand segment.
During the question-and-answer period, a number of investors inquired about Barnes & Noble’s troubled Nook business. Barnes & Noble estimated its share of the U.S. e-book market at 9%, down sharply from the 27% market share it claimed in 2011.
Mr. Boire, however, said that the retailer remains committed to its Nook offerings and its 2 million active Nook customers. “We’re not walking away from them,” he said.
