Barnes & Noble holiday sales dip, Amazon plans to open NYC bookstore

The online giant Amazon is opening its first bookstore in New York City in the spring, in addition to three existing ones in the country. 

First Look

As many bookstores around the country struggle, one online giant is betting on brick and mortar.

Barnes & Noble reported Thursday that comparable store sales for the company – the largest retail bookseller in the United States – declined 9.1 percent over the nine-week holiday season. A day earlier, Amazon announced plans to open its first bookstore in New York City, the Wall Street Journal reports.

Barnes & Noble said its sales decrease was mostly due to a declining interest in coloring books and art supplies, as well as last year’s best-selling album by British pop singer Adele, which together accounted for about one-third of the difference.

"Although books outperformed the company as a whole, we were not pleased with our results," Leonard Riggio, chief executive officer of Barnes & Noble, said in a statement. "Fortunately, post-holiday traffic and sales have improved and we are optimistic for the remainder of the fiscal year, and we believe this most unusual retail season may be behind us."

Despite reduced traffic in its physical stores, the company says it sees an approximately two percent rise in online sales for the same holiday period.

“There’s no question that the online business is increasing every year and that retail store sales are shrinking,” Mr. Riggio told The Wall Street Journal Thursday. “The decline in store traffic is something that almost every major retailer experienced.”

Based on the holiday sales results, the book retailer cut its forecast for the year, expecting a comparable store sales decline of about six percent. The company says it still expects to exceed the previous year’s operating profit, however, because of expense management.

This report comes one day after Amazon announces its latest push for a physical retail presence.

“We are excited to be bringing Amazon Books to The Shops at Columbus Circle, Time Warner Center in New York City in 2017,” Deborah Bass, a spokeswoman for Amazon, says in an email.

The new 4,000-square-foot New York store is slated to open in the spring in the multistory shopping center owned by Related Cos. on 59th St., where 50 retail shops and several upscale restaurants are also located.

Since opening its first physical bookstore in Seattle in late 2015, Amazon has opened two other stores in San Diego and in Portland, Ore., and has two other planned sites in Chicago and in Boston.

This new store will presumably offer a selection of bestsellers as well as Amazon’s Kindle devices, featuring an integration of Amazon and Goodreads reviews like the existing ones, according to Recode.

In an annual shareholder meeting in May, Amazon CEO Jeff Bezos said the company was planning to expand its brick-and-mortar stores, according to The Wall Street Journal.

"We’re definitely going to open additional stores, how many we don’t know yet," Mr. Bezos said at the time. "In these early days, it’s all about learning, rather than trying to earn a lot of revenue."

The company also currently has one grocery store in Seattle and 32 pop-up stores across the country featuring their devices, services, and some digital content. It is one of the few online retailers that have crossed into the physical retail realm – another example is China’s e-commerce giant Alibaba, which opened a physical store in China in early 2016.

As the US online behemoth dives into brick-and-mortar retail, analysts say Amazon is looking to provide a more intimate customer relationship. “We believe that by opening physical stores, Amazon might be looking to provide a more personal shopping experience to its consumers, reduce shipping costs by providing a store pick up facility and integrate the online and offline shopping experience for its consumers in addition to creating a strong brand image,” Trefis Research wrote.

The Boston Globe reported that Amazon's gadget sales, not the books themselves, might be the real beneficiary of its bookstores, some analysts say.

Commenting on the shift in retail and the reality of the field, Riggio told The Wall Street Journal “there will be less retail stores 20 years from now. The question is which ones will survive and what will be the attributes that make customers come.”