One by one, storied chains in books, toys, sporting goods and more have disappeared from American malls and main streets, then vanished from our collective memory. Now, Barnes & Noble, the last chain bookstore standing, is finally buckling, too.
The big picture: The arc of retail has been bending toward consolidation for decades. Superstores like B&N and Toys "R" Us took us from shopping small to shopping big. Next, we seem to be moving inexorably toward one, powerful, all-knowing, everything store.
Driving the news: B&N announced yesterday that, after hearing acquisition interest from several parties, it has initiated a strategic review toward possibly selling itself to stay afloat. One bidder is founder Len Riggio, who owns 19% of the company but says he will follow the recommendation of an independent board appointed to handle the review. B&N's beleaguered shares soared as much as 21% on the news.
How we got here
In 1996, Jeff Bezos, then the 31-year-old CEO of a scrappy startup that sold books online, was approached by Riggio, the multi-millionaire boss of iconic B&N, about a collaboration. For context, Amazon had $16 million in sales in 1996, and B&N $2 billion.
Riggio told Bezos that B&N would soon start its own website and crush Amazon, reports Bloomberg's Brad Stone in The Everything Store, a history of the company. It would be better if they worked together. Bezos declined.
Flash forward: Today, Amazon has about half the market share for print books, and B&N only a fifth, according to Mike Shatzkin, an industry consultant.
- Amazon's share jumps to 84% for e-books. B&N has just 2%.
- The e-commerce behemoth is hovering around a $1 trillion market cap, while B&N is worth just about $475 million, 0.05% of that.
The long view: Books were the first category to reach an e-commerce tipping point — a 20% market share, the point-of-no-return at which, as industry after industry has discovered, Amazon's encroachment wipes out almost everyone. That was in 2004, and the losers were Borders, Crown Books, Book World and others.
For 14 years, B&N managed to hang on. But, after closing 90 of its 720 locations in the past seven years, often leaving areas of hundreds of thousands of people without a single major bookstore, it appears prepared to call it quits.
Meanwhile, Amazon's reach has continued to be deadly. It wiped out the sporting goods giant Sports Authority and has delivered staggering blows to department stores like Macy's, J.C. Penney and Sears.
Amazon declined to comment. But there is something sentimental and very different in the elimination of bookstores versus department store chains. Families hang out in bookstores, and culture, history and community are imbibed there. ...