Barnes & Noble, On the Sales Block, Will Add eBook Boutiques in Stores

Electronic books will be a much more visible presence in Barnes & Noble's brick-and-mortar locations, as the world's largest bookseller creates 1,000-square-foot eReading NOOK Boutiques in its 720 stores.

The boutiques, which will be introduced beginning this summer, will feature demonstration tables and multiple operating NOOK devices for trial, with large flat panel displays on adjoining walls featuring video demos of the readers and more than 100 accessories. Store associates will offer device demonstrations, help customers download the company's free NOOK software to mobile or computing devices, and provide ongoing support.

Barnes & Noble entered the electronic book market one year ago, and already the NOOK eBooks are its best-selling items, according to the company. Commenting on the boutiques, CEO William J. Lynch said "No other company is doing what Barnes & Noble is doing, utilizing its store footprint and innovative technology to add value to the customer's eReading experience, including unique features such as digital eBook lending, free Wi-Fi connectivity, in-store browsing of complete eBooks and exclusive content."

The chain's aggressive move to create synergies between its traditional products and new electronic media comes at a difficult time for brick-and-mortar retailers in general, and for book and music retailers like Barnes & Noble in particular. The company's Board of Directors, saying it believes its shares are now significantly undervalued, announced on August 3 that it was seeking a buyer as a means to increase stockholder value. Leonard Riggio, the company's founder and largest stockholder, has informed the Board that he intends to consider the possibility of participating in an investor group to acquire the company.

In the quarter that ended May 1, 2010, the company posted a net loss of $32 million, despite total sales of $1.3 billion that were 19% higher than sales for the same period in 2009. For the full fiscal year, which also ended May 1, the company's comp store sales declined by 4.8%.
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