retail news in context, analysis with attitude

...with brief, occasional, italicized and sometimes gratuitous commentary…

• The Chicago Tribune reports that G Asset Management, a private investment company, has offered to acquire 51 percent of Barnes & Noble in a pitch that values the entire company at $1.32 billion. The offer is contingent on due diligence and the ability to get financing for the deal.

In addition, the investment group said that if such a deal could not be completed, it would like to buy 51 percent of Barnes & Noble's Nook e-reader business.

Can't imagine why anyone would want to buy a buggy whip manufacturer….er, bookstore chain.

• Interesting piece from the Daily Financeabout how daily deals site Groupon has achieved "scale and brand recognition that is unparalleled among its competitors," with "44 million customers and almost 70 million app downloads to date." However, the company continues to suffer from one basic problem - it doesn't make any money.

"The problem that Groupon has not been able to solve is the management of its selling, general, and administrative expenses (including marketing expense but excluding stock compensation)," the story says. "While these expenses improved as a percentage of revenue from 58% a year ago to 47% in  the fourth quarter of 2013, this is still far too high a percentage for the business to ever turn a consistent profit. "

In addition, Groupon's decision to go beyond the daily deals business and try to make its site a go-to site for anyone looking to buy anything from a computer to a vacation package puts it in competition with companies that have been a lot more successful and have considerable brand equity.

Our experience with Groupon has been largely positive … only once, when Mrs. Content Guy tried to buy lawn seeding services via the site, was it a disaster … and that wasn't Groupon's fault, but rather that of the company, which didn't have the ability to live up to its promises. But when it comes to things like restaurant discounts, it is a great service. Though how it makes money long term is a good question…
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