The past couple years have been brutal for some retail chains because of disruptive changes in technology. For example, this week Blockbuster (BBI) said it may file for bankruptcy. With huge debts and lagging sales, the company continues to lose marketshare to online alternatives like Netflix (NFLX). There's also the case with H&R Block (HRB). The company is feeling the pressure against rivals like Intuit's (INTU) TurboTax, which continues to grow its online business.
It's scary stuff. And as a result, some companies are trying to take preventative measures. Just look at Barnes & Noble (BKS), which today announced a major shake-up of its senior management ranks.
The company replaced its CEO, Steve Riggio, with William Lynch, who was in charge of B&N's website (Riggio will remain the vice chairman). While there are no plans to unload the retail operations, the company's main priority is now digital technologies.
And for good reason. Amazon.com (AMZN) is making great strides with its Kindle and Apple (AAPL) should also be a significant force with its upcoming iPad. There are other notable players, such as Sony (SNE).
Lynch came on board B&N in February 2009 and he's wasted little time. After all, he led the successful launch of the Nook e-reader.
Then again, Lynch has a strong background in digital media. His prior stints included being an executive vice president of HSN.com and the CEO of Gifts.com.
But there will definitely be challenges. B&N wants to integrate technologies across its 1,300 retail outlets, which is likely to take time as well as increase costs. However, the company has little choice as its rivals will certainly not let up.
Tom Taulli advises on business tax preparation and is also the author of a variety of books, including The Complete M&A Handbook. His website is at Taulli.com.
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Reader Comments (Page 1 of 1)
3-19-2010 @ 6:05AM
Dan Barnett said...
I'll give you that there is minimal downside.
With all the rumors of bankruptcy and the consistent bad news for the past few years, even 30 cents a share seems steep to me.