retail news in context, analysis with attitude

The Wall Street Journal reports that Barnes & Noble management is considering the acquisition of selected locations around the country being shuttered by rival Borders, which has gone into bankruptcy protection and is closing 30 percent of its stores.

According to the story, “The disclosure was greeted with some pointed questions from analysts. Barnes & Noble said today it is suspending its stock dividend to leave room to take advantage of ‘market opportunities.’ Analysts wondered why Barnes & Noble would want to spend any more money on its bricks-and-mortar retail business, where physical book sales are declining.”

Barnes & noble CEO William Lynch said that “Barnes & Noble’s stores continue to be very profitable – unlike the situation at Borders, which said it is losing $2 million a week on the store locations slated for closure. Barnes & Noble executives also said the majority of the company’s Nook e-reading devices are being sold at its retail stores, which have prominent displays for shoppers to try out and buy the e-readers.”
KC's View:
I can see where this might make sense in the short term, but it just feels wrong. Glad I don’t own any Barnes & Noble stock.