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 The U.S. bookseller, which opened in 1965 as a university bookstore
in New York, wants a much bigger presence on college campuses, where
students last year spent an average of $1,200 on textbooks and
supplies, according to the College Board.
Barnes & Noble, now the second largest operator of college
bookstores with 696 shops, plans to have about 1,000 locations
within five years, Max Roberts, chief executive of the company's
college business, said in an exclusive interview at Rutgers
University's bookstore in New Brunswick, New Jersey.
It intends to do that by getting more schools to outsource their
bookstore operations with the lure of nicer, higher-grossing stores
and by poaching accounts from larger rival Follett Corp, which runs
940 stores.
Success isn't a slam dunk: About 45 percent of U.S. colleges still
run their own stores. And overall college store sales have stagnated
in recent years at about $10 billion, according to the National
Association of College Stores.
The push comes as Barnes & Noble is mulling selling itself and needs
new sources of revenue because of sluggish sales at its traditional
bookstores and a shrinking Nook digital unit.
Roberts said the company's retail skills and ability to offer
large-scale textbook rental programs, a growing part of college
retail, generate higher sales per store, a benefit for schools,
which get a percentage of sales rather than rent.
"We want to make our stores the center of the community, and appeal
to other consumers, not just students," said Roberts, who earlier in
his career worked at R.H. Macy & Co.
Barnes & Noble is trying to go beyond the usual campus stores by
offering amenities like bigger cafes, a larger selection of
clothing, and in some stores, Clinique cosmetics counters, which are
especially appealing to international students looking for gifts to
bring home.
The Rutgers store is an example of the "academic superstore" concept
Barnes & Noble thinks it can eventually bring to 75 college stores,
compared to 35 now. These superstores are about 30,000 square feet,
a size more typical of a traditional Barnes & Noble store than a
college store.
TOUGH SELL
The college unit, which Barnes & Noble bought in 2009 from its
founder, Leonard Riggio, last year generated about $1.77 billion in
sales, or 25 percent of the company's total, and overtook the main
business in terms of store count in 2013.
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The college chain is part of Barnes & Noble's Nook Media subsidiary,
in which Microsoft Corp has a 17.6 percent stake and education
company Pearson PLC has 5 percent.
Barnes & Noble added some 50 college stores in the last two
years. Reaching the 1,000-store mark will mean winning over many
holdouts among the some 1,500 college stores that remain
independent.
"The low-hanging fruit has largely been picked," said Ed
Schlichenmeyer, deputy CEO of the National Association of College
Stores. "They stay independent because they feel a need to be
adaptable to faculty, and increasingly, student demands."
Some big-name holdouts include University of California, Los
Angeles, and the University of Southern California.
Still, Maxim Group analyst John Tinker said that even if the
expansion goes more slowly than Roberts expects, it will improve the
company's odds of fetching a good price if it splits itself up or
sells itself.
"Barnes & Noble's bookstores are not a growth story," Tinker said,
noting why the college push is so important.
(Reporting by Phil Wahba in New York; Editing by Jilian Mincer and
Leslie Adler)
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