One theory about a recession is that people will not buy cars or refrigerators, but they will buy beer, razors, soap and books. If you can't ride around in a new Chevy, at least you can read about someone who is.
That theory went out the window, at least in part, when Barnes & Noble (NYSE: BKS) said its same-store sales were down -- a lot.
Last year, the nation's largest book seller made a little money in the quarter ending November 1. It was a very little, $4.4 million. This year, BKS lost $18.4 billion as same-store sales fell 7.4%. Barnes & Noble also dropped its forecast for the next quarter.
The BKS earnings news is particularly bad as the holiday season begins. Companies that sell discretionary items for under $30 have probably hoped that they would benefit, perhaps only modestly, from consumers looking for relatively cheap gifts for grandpa and the kids.
Even cheap is looking expensive this holiday. Although there is Barnes & Noble stock. It is only $12.25 a share.
Douglas A. McIntyre is an editor at 24/7 Wall St.
Cramer on BloggingStocks: Don't paint everything with the jobs brush
Seven banks go up in smoke ahead of the holiday weekend
Sears offering hedge for consumers who lose their job -- good idea?
Reader Comments (Page 1 of 1)
11-21-2008 @ 11:53AM
Lita Epstein said...
Doug,
As an author I watch these numbers closely. It's possible that the loss in sales for Barnes & Noble is more greatly impacted by the success of Amazon (and other alternatives sellers such as Costco) than the fact that people aren't buying books. In October, Amazon reported sales were up 31% from the same quarter a year ago.
Lita
11-21-2008 @ 2:45PM
TX CHL Instructor said...
Lita, you beat me to it. The problem with B&N is not that people aren't buying books, it's the growing irrelevance of B&N's brick'n'mortar stores.
I buy about a dozen books a year (and read quite a few more than that, thanks to my public library), and I haven't set foot in a physical bookstore in over a year.
11-21-2008 @ 2:46PM
beachpaul said...
I bought four books from B&N last week. Two I had gift wrapped. All four were signed. Buying a hard cover that isn't a first edition, first printing, at list price is pointless. Wait for the paperback. All four, from two different authors, were signed. That might help them to retain value, but don't bet on it. They do make nice holiday gifts.
11-21-2008 @ 5:02PM
jack white said...
Since the last few months, I have to eat dogs food to survive. Pls somebody bail me out!! I can't afford to fly on private jet to go to Washington to beg for help like those automakers ceo's, I guess I have to walk!!!
11-28-2008 @ 8:33PM
dee said...
What does dog food taste like?