Connecting Readers and Writers discussion

My publisher e-mailed this CNBC News bulletin to me. It may be of interest to some group members.

CNBC - Friday, Feb. 21 at 5:15 p.m. ET

Private investment management firm G Asset Management said on Friday it has made a proposal to acquire a 51 percent stake in either Barnes & Noble or in the Nook digital business.

The proposal for Barnes & Noble would be for $22 a share, which would value the chain at $1.32 billion. The current offer is a sweetened version from G Asset Management's proposal in November, which valued the bookstore chain at $20 a share.

Alternatively, G Asset Management has proposed to acquire 51 percent of the Nook segment, valuing the segment at $5 per share.

Hi,
I'm a reader. I was just wondering if this buy-out of the majority of either B&N or Nook stock is viewed as a good or bad thing as far as authors or even general consumers go? I don't have any background knowledge of what this means. Thank you in advance for your patience in providing a short explanation!
Karla

I don't care what rationalizations anyone makes. What interest--might a 'private investment management firm' have in selling books? What values? What sense of responsibility? What do they care about the book printing industry, its employees, or its infrastructure? What happens if they run B&N into the ground? Why 'play with' book publishing as if its just another commodity like steel or manganese or tin? Its insane.

Ah, I see, and that was exactly what I was afraid of. What is driving B&N toward making this deal? Are they losing money? Are they ripe for a corporate takeover? Did they grow too fast with the addition of Nook? Or are they simply out to make some money?

I thought I'd heard that B&N was close to bankruptcy in the not-so-distant past? They, like Borders (sob--loved that store) were too late to jump on the eReader market, unlike Amazon who saw the light & came out with Kindle, and lost millions! Borders finally caved and closed their doors. B&N has been trying to remain afloat. Usually, when a company is losing money and flailing, big guns move in for the kill--'kill' being the operative word here used as a MAJOR forewarning that B&N will either get a much needed boost in marketing, or will be divided and sold off--one option even resulting in being moved overseers. Let's cross our fingers that the boost in marketing is the end result. Walden Books no longer exists in malls. Borders is lost forever. B&N is really the only bookstore other than small mom & pop stores, and those are usually wonderful USED books.

I did not know that, Karey, thanks. I agree, B&N is the only large chain retail book store left where you can actually go in and touch, smell and browse real books. I love the small stores too, but the selection at B&N is awesome. I don't mind e-books as they certainly don't take up any room on my bookshelf. But there are always those special books or books you collect from certain authors when you want the "real" thing. For me, as a reader, there is something very tactile and satisfying about being able to turn the pages of a paper book and I would be very sad if the e-book market squeezed them out. I'm guessing authors would feel the same way? It's really too bad that B&N is in this position.

Karla wrote: "I did not know that, Karey, thanks. I agree, B&N is the only large chain retail book store left where you can actually go in and touch, smell and browse real books. I love the small stores too, but..."

Hear-hear! Everything you said. I have shelves and shelves of books. The thought of having to order every single one...no bookstore to go in and enjoy the discovery of an author whose book is on sale, to just browsing through rows and rows of wonderful books...to take that away...
That said, it does open the door for a new company to open its doors. I would have to advise that they pay attention to how cheaply one can acquire books on Amazon and try to compete better with that. My only complaint with B&N is their store prices vs. online. Another reason I really loved Borders.

Yes! I can spend hours in B&N and just get lost among the shelves. My favorite way to spend a rainy afternoon. :-)

I am in total agreement about B&N's online vs. store prices too, but have to admit there are more overhead costs in a store itself - building upkeep, real estate taxes, employees, inventory - so I can understand store books costing more than purchasing them straight from the warehouse.

As to the business atmosphere being ripe for a new big book chain, there must be a reason that the industry is down to only one now. Which brings us back to square one - Feliks' comment about a company knowing nothing about books now proposing to own 51% stock in either B&N or Nook and the uncertainty of either one being sold off off in pieces or run into the ground. Not very encouraging . . . :(

Well, I think this economy--worldwide--hasn't helped.
As for spending hours in B&N...my daughter's favorite birthday gift is to have an unlimited shopping spree there. We sit and drink coffee while she spends hours browsing. I can browse, I love books--shocking as an author, I know :D--but she has even ME beat when it comes to browsing. With rheumatoid, I can't stand as long as she can.
And when she brings me two baskets, filled with books...AND her international Vogue magazines, I'm sure the entire store can hear my MasterCard's silent scream :D

You are absolutely right about the economy being a factor. Oh, I remember doing the same for each of my kids as they were growing up - so much fun! They are extremely happy with B&N gift cards now. My daughter never goes anywhere without her Nook and my son has the Nook app on his laptop. And fortunately they both work part-time in libraries! :-)

Karla wrote: "You are absolutely right about the economy being a factor. Oh, I remember doing the same for each of my kids as they were growing up - so much fun! They are extremely happy with B&N gift cards now...."
I think if my daughter worked in a library, she'd take a sleeping bag and stay overnight. She's the kid who would bask in The PageMaster. My Nook was my first eReader--loved it, but so many more titles were available on Kindle. I opted for an iPad so I could have both Nook and Kindle apps and enjoy without having to make sure I had both eReaders. I think Nook is saving B&N. Let's hope this company is doing nothing more than fishing, or, if they DO buy, will truly enhance B&N.

I like B&N and have enjoyed browsing for books there many times. It's wonderful to be able to walk through row after row of books and see what you happen upon. But always remember, B&N were the Amazon of their day. When they opened, smaller, independent book shops and smaller chains cried "foul" because B&N not only stocked huge inventories the smaller retailers couldn't afford but also sold books at discounted prices. Many a small shop went under around the time of B&N's appearance. Remember the Tom Hanks film "Little Shop Around the Corner" (based on a much earlier--and better--film starring Jimmy Stewart, by the way)? The plot revolved around a small bookshop vs. mega-retailer.

Of course, there was also Borders. I remember the first Borders that opened where I lived (Houston at the time). It was a dream. I no longer had to order odd books that I wanted. Borders usually had just about anything. The first one near us opened in an old movie theater. It seemed huge at the time.

But my favorite bookshop was the little place that sold paperbacks and was a fifteen minute walk from my house when I was a kid. Yes, that was the '60s. I remember buying Poul Anderson's Ensign Flandry there as well as dozens of other sci-fi books, all cheap because the store carried new and used books, and you could bring books back when you finished them, get store credit and buy more books. I discovered Donald Hamilton's Matt Helm books there. (Yes, I was too young to be reading those, and it probably warped me forever.) But I hung out at that shop, and so did my friends in the neighborhood. Twelve-year-old boys sneaking down to the bookstore to buy sci-fi and espionage novels. Seems like another age.

So I hope B&N figures out how to survive and remains a place where I can go and browse for books. But if they go belly up, I won't shed any tears. The market's a tough place. Just ask all those small-shop booksellers who couldn't compete with B&N and Borders.

Well said and good to remember. Enjoyed your memories of the small bookshop of your youth. There are still some of those surviving and I love to wander through those as well. You never know what treasures you'll find.

Taking my daughter to one this weekend. She's never been to a used bookstore, but hears me talking about the treasures I've always found in 'em...besides, supports the local merchants, right?

Feliks wrote: "I don't care what rationalizations anyone makes. What interest--might a 'private investment management firm' have in selling books? What values? What sense of responsibility? What do they care abou..."

There have been similar stories in the business press about Amazon going after Barnes & Noble or at least the Nook portion. B&N announced recently that Nook can now sell internationally. So B&N is definitely trying to compete. However, private investors are like real estate developers; they are into flipping for a profit. So it is possible that B&N is positioning for the best price.

As for the bookstores, enjoy them while they last. The floor space dedicated to books seems to shrink every quarter in favor toys, crafts & Starbucks. Even the CD and DVD sections are shrinking.

E.G. wrote: "Feliks wrote: "I don't care what rationalizations anyone makes. What interest--might a 'private investment management firm' have in selling books? What values? What sense of responsibility? What do..."

I've noticed that too - the shrinking of book space. I was totally surprised by the size of the toy and game area at B&N the last time I was there. What does that say about the future of the printed book? Also, at the risk of sounding completely ignorant, would an acquisition of Nook by Amazon even be allowed? It would seem to me that the ramifications of a monopoly like that would be huge.

Karla wrote: "E.G. wrote: "Feliks wrote: "I don't care what rationalizations anyone makes. What interest--might a 'private investment management firm' have in selling books? What values? What sense of responsibi..."

You would think the US anti-trust would block it, but they've allowed Comcast to pretty much take over cable tv and buy Netflix...

Yeah I think (and i even made a reference in my current book that will be published soon) that book stores are going away. Bar none. In about 50 years (and that is a VERY large stretch of gap), the next generation won't know what book stores were. yes there are rare books and collectables, but we are peering into the future.
I think that B&N were starting to decline, so why not jump a little ship and make a little profit by selling. Their nook isn't too fancy/selling as well as the Kindle I'm sure. I think that someone buying the stocks has something planned in store that we will see here soon (maybe upgraded nooks or different styles)

Look at letters: USPS has started closing stores due to the shrinkage of letters being sent when compared to everyone switching to emails/ecards. Its the same concept: Books are shrinking and we are the generation that is seeing this (generation meaning everyone alive now that remembers book stores hahaha)

Here's what I think will happen: http://smithyofthewrittenword.blogspot.com/2013/08/industry-shifts-you-should-too.html.

(Sneak Preview: I predict that as mega booksellers move to online-only storefronts this decade, market space will reopen for smaller, more innovative, more agile local booksellers).