Shop Talk
Retailers, consumers and prices
Check Out Line: Showdown at the Barnes & Noble corral
Check out Barnes & Noble’s victory at its annual meeting.
Shareholders of the U.S. bookseller had to choose between dissident investor Ron Burkle and Chairman Len Riggio as a bitter proxy battle between the chain’s top two stakeholders came to a head.
And the winner of the “gunfight” was Barnes & Noble, whose slate of directors won election.
Burkle, whose Yucaipa Cos owns 18.8 percent of Barnes & Noble shares, had been on a slate of three nominees seeking seats on the board, including the one held by Riggio, the man who built the chain into the largest U.S. specialty bookseller and the company’s largest shareholder with a 28.2 percent stake. Three of the nine board seats were up for a vote.
Burkle also asked shareholders to modify an anti-takeover “poison pill” that Barnes & Noble put into place last year after Burkle doubled his stake. Burkle had accused Riggio of running the company for his personal benefit and leaving it saddled with debt and ill-prepared for the shift to electronic books.
Check Out Line: Borders launches e-bookstore … finally
Check out Borders Group finally launching its e-bookstore.
The No. 2 U.S. bookstore chain’s electronic bookstore comes nine months after rival Barnes & Noble debuted its Nook e-reader and three months after Apple introduced its popular iPad tablet computer, allowing both companies, and Amazon.com, which sells the Kindle e-reader, to get a head start.
No worries, says Borders, which saw sales at its namesake superstores open at least a year and on its website fall 11.4 percent in the first quarter.
Check Out Line: Ron Burkle invests in yet another challenged company
Check out Ron Burkle’s continued affinity for companies in trouble.
The supermarket magnate has taken a 6 percent stake in American Apparel, according to a regulatory filing on Thursday. That’s the billionaire’s latest investment in iconic companies that just can’t seem to get back on track.
The apparel maker and retailer, founded and run by the colorful, often scandalous Dov Charney, came close to tripping a loan covenant with its creditors but reached a deal yesterday, averting disaster.
Check Out Line: The latest bookseller boss shakeup
Check out the new guy in charge at Barnes & Noble.
On Thursday, Barnes & Noble named William Lynch, the (young) father of its Nook e-reader, as its new chief executive. Outgoing CEO Stephen Riggio — the chairman and founder’s brother — is sticking around as a vice chairman.
Barnes & Noble appears to be betting that the Nook will be a prime source of future growth. Lynch, 39, called e-books “key to our future” during a morning conference call.
Check Out Line: Power plays in the air
Check out the power plays going on in the consumer world.
Walgreen said it will buy Duane Reed for $618 million in cash, catapulting the largest U.S. drugstore operator into the top spot in the New York City area. The deal price also includes the assumption of $457 million in debt.
Duane Reed is owned by private equity firm Oak Hill Capital Partners and operates 257 drugstores in the New York metropolitan area. Duane Reade will continue to operate under its brand name, and Walgreen expects to retain the employees at its stores, pharmacies and distribution centers.
Check Out Line: Borders had a lousy Christmas
Check out Borders’ poor 2009 holiday sales numbers.
The No 2 U.S. bricks-and-mortar bookseller disclosed its how sharply sales fell during the disastrous 2009 holiday season on Monday (apparently hoping no one would notice on the Martin Luther King Jr holiday, with the markets closed). It is hardly the kind of news Borders needs after it has been lambasted by investors and analysts alike for coming so very late to the e-books reader game.
Borders said comparable sales at its superstores fell 14.6 percent in the 11-week period ended Jan. 16. (To be fair, excluding weak sales in items such as music and video, which Borders is moving away from, sales were down 10.9 percent.) How did it stack up against its biggest rival? Barnes & Noble’s same-store sales fell 5.4 percent in the nine weeks ended on Jan 2.
Check Out Line: No nook for you
Check out another nook delay.
Some of Barnes & Noble’s top stores were supposed to have nook e-readers available for sale today. Instead, shoppers can just look at the nook, not take it home.
In-store demo models have been delivered and Barnes & Noble is accepting pre-orders, spokeswoman Mary Ellen Keating said.
Check Out Line: When cost cuts aren’t enough
Check out the cost cutting formula failing at Sears.
In the past few weeks a slew of retailers, ranging from Target to Macy’s to Dillard’s, have posted results that were better than Wall Street expected, helped by cost cuts. Retailers have done everything from freezing executive salaries to eliminating jobs to slowing store expansion plans.
But on Thursday, Sears reported a surprise loss in its second quarter while analysts were expecting a profit.
Check Out Line: Buying basics buoys big chains
Check out the ten largest U.S. retailers.
The National Retail Federation’s STORES magazine is out with its annual ranking of the top 100 retailers.
The list shows that U.S. consumers have been focused on bargains and basic necessities, such as food and medicine. Wal-Mart tops the lineup, followed by Kroger and Costco. Home Depot fell from No. 2 in 2007 to the fourth spot in 2008 as many shoppers decided to cut back on costly home-improvement projects.
Check Out Line: A tale of two retailers
Check out Americans buying fewer books and searching for cheap chic.
Barnes & Noble said quarterly sales at its stores fell 4.8 percent and comparable sales on its web site fell 10.4 percent in the latest quarter. Over at Ross Stores, sales rose 5 percent, as consumers scooped up bargain fashions.
Barnes & Noble CEO Steve Riggio called 2008 “the most challenging year that the company and the industry have ever experienced” and added the company would continue to hold down expenses to cope.
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