Barnes & Noble shares closed down 11.8 percent Thursday at $6.88 after its loss widened to $30 million for fiscal Q2 from $20 million in the year-ago quarter. Overall sales slid to $791 million from $858 million, and Nook division revenue plummeted to $25.9 million vs. $35 million a year ago, said the company in an SEC filing. It made a heavy push into non-book categories including toys and games in recent quarters to try to prop up sales, but CEO Demos Parneros said the company is now focusing more on its roots. "Book sales continued to strengthen, and we saw improved traffic and conversion trends,” he said: B&N will “continue to place a greater emphasis on books, while further narrowing our nonbook assortment.” Mix shift along with cost reductions will help B&N reach EBITDA of $180 million in the holiday quarter, he said. The filing attributed declining trends to “lower store traffic and the challenging retail environment.” BN.com and Nook are “important components” of the company’s retail strategy, and it believes long-term improvements to the BN.com platform will make it more competitive. The company continues to “judiciously bring” new Nook devices and apps to market, it said. The estimated life of a Nook e-reader is two years, said the company. B&N had 632 retail stores at the end of October, six fewer than in the year-ago quarter. In November, B&N responded to a Wall Street Journal article on a Sandell Asset Management proposal to take the retailer private for $650 million. The proposal would require $500 million in debt financing and require shareholders, including Chairman Leonard Riggio, who owns 18 percent, to roll their shares into a new private entity controlled by Sandell. Riggio had "no intention" of rolling his shares, and the company said a $500 million debt financing was "highly unlikely."
Wedbush Securities maintained an “underperform” rating on Best Buy after the company’s Thursday earnings call, on what it expects to be “escalated holiday discounting by Amazon and Walmart.” The 2017 holiday season will “challenge guidance,” wrote analyst Michael Pachter in a research note, with heightened competition from online retailers pressuring gross margin. Wedbush is adjusting its FY 2018 estimates for revenue to $41 billion from $40.96 billion and for earnings per share to $3.93 from $3.95, because of Q3 results (see 1711160035) and expectations that “Q4 comps will come in below the guided range given a more challenging holiday retail environment.”
Nearly seven in 10 Americans, some 164 million consumers, are planning or considering shopping over Thanksgiving weekend, said the National Retail Federation Tuesday. NRF’s annual holiday shopping survey included Cyber Monday for the first time, in addition to Thanksgiving Day, Black Friday, Small Business Saturday and Sunday, which hasn't been given a designated name. A fifth of survey respondents planned to shop on Thanksgiving, while 70 percent planned to open their wallets on Black Friday, it said. Forty-three percent expected to shop on Saturday, with 76 percent saying they would do so specifically to support Small Business Saturday. Twenty-one percent expected to shop on Sunday, and 48 percent were eyeing Cyber Monday shopping, it said. Two-thirds of respondents said they were shopping over the five-day period to take advantage of deals and promotions, 26 percent cited the tradition of shopping over Thanksgiving weekend and 23 percent said it’s “something to do” over the holiday weekend, said NRF. Another 23 percent said the time frame meets their holiday shopping schedule. Some 56 percent of Americans already have started their holiday shopping, but most still have a long way to go, NRF said. Twelve percent of consumers have completed at least half of their shopping, and 2 percent have finished. Of the 31 percent of consumers who don't plan to shop over Thanksgiving weekend, 52 percent won’t because they don’t enjoy the experience, and 46 percent said nothing would change their mind. Another 27 percent of those not planning to shop said a good sale or discount might lure them to stores. The survey of 7,439 consumers was conducted Oct. 31-Nov. 7 and has a margin of error of plus or minus 1.2 percentage points.
Big-screen screen TVs, laptops, tablets, smartphones and smart home devices lead Best Buy’s holiday gift list, said the retailer Wednesday. Among items in the retailer's spotlight this season are the iPhone 8, MacBook Pro, iPad Pro 10.5-inch, Apple Watch Series 3, Beats Studio 3 wireless headphones, Amazon Echo Show, Nintendo Switch, Samsung Galaxy Note8, DJI Mavic Pro Quadcopter drone and Sonos One speaker with Alexa. A Best Buy survey of 1,500 American adults via a web-based panel conducted Oct. 18-23 indicated tech enthusiasts are more likely to also buy gifts for themselves when shopping for others (73 percent techies vs. 49 percent for average shoppers), 21 percent of sports fans want a TV more than any other gift this season vs. 13 percent of non-sports fans; and students want video games first, along with computers, it said.
“The excitement of Thanksgiving Day store openings has now faded, making them a low risk, low reward proposition,” said NPD analyst Marshal Cohen in a report. Closing for Thanksgiving Day won’t be detrimental for stores, and those that open “won’t see a significant boost this year either,” Cohen said. The spike the retail industry will get during the peak Thanksgiving week will come from online sales, which will “continue to grow,” he said. Two-thirds of consumers plan to do at least some of their holiday shopping online this holiday season, said a September NPD survey of 3,785 consumers ages 18 and older. Some 30 percent of holiday shoppers plan to start hitting stores over Thanksgiving weekend vs. 12-16 percent prior to 2014 when online shopping began its steep incline, said the analyst. It will be the first shopping season when more U.S. consumers begin shopping in the middle of the season, defined as Thanksgiving weekend through Cyber Monday, vs. “late” in the season, or early December, he said. “Despite all the efforts in recent years to get shoppers shopping before Black Friday week we see little to no movement early in the season, but the last-minute shoppers have moved their timing up.”
Best Buy joined the list of retailers this holiday season offering expanded delivery options. The company widened same-day delivery to more than 25 metropolitan areas this fall, bringing the number to over 40, it blogged Monday. Customers who choose same-day delivery have to place an order by 3 p.m. local time, and they’ll receive the package by 9 p.m. that night, Best Buy said. Same-day delivery is available daily, but Sunday deadlines are clipped by an hour. The up-charge for same-day delivery is $5.99, compared with Best Buy’s standard across-the-board free shipping through Christmas Day, which has no minimum purchase requirement or membership fee, it said. The retailer also pushed store pickup, saying in many cases orders are ready in an hour or less. Some stores have dedicated parking spots for online customers who pick up at the store, it said.
Lease-to-own (LTO) retailer Aaron’s in Q3 “saw improving trends in customer deliveries, driven by more effective marketing and promotional activity,” said Douglas Lindsay, president-sales and lease ownership, on a Friday earnings call. The value of the “average ticket” for new LTO customer agreements in Q3 increased sequentially from Q2, “as investments in our new merchandising team are beginning to pay off,” said Lindsay. Aaron’s is “going through a number of initiatives in merchandising,” said Chief Financial Officer Steve Michaels in Q&A. The company hired Steve Olsen as chief merchandising officer in January, said Michaels. Olsen, a onetime inventory control and supply chain executive with Office Depot, “brought a more analytical approach to our merchandising program, some of which is just looking at each product category and making sure we have true good-better-best options for the customer,” he said. Aaron’s also is bringing “more style, more color, more functionality into our mix,” he said. “And it’s not just in furniture. It’s in electronics, and it’s really in sort of rationalizing our computer assortment and TV assortment.”
Target refreshed its free shipping promotion for the holidays, with no minimum purchase required Nov. 1-Dec. 23, it said Monday. The retailer is appealing to consumers on multiple fronts, expanding the Target Restock next-day delivery service it has been testing since summer in Dallas, Denver and Minneapolis to the Atlanta, Chicago, Los Angeles, New York, Philadelphia, San Francisco, St. Louis and Baltimore-Washington markets. Restock covers some 15,000 “essentials,” which Target said includes personal care items, baby products and cleaning supplies. Customers who order by 2 p.m. Monday through Friday will get their box -- 45 pounds maximum -- the next day for $4.99 shipping, it said. Target also pitched in-store pickup, saying 95 percent of orders are ready within an hour. Target will price-match, up to 14 days after purchase, for customers who bring in proof of purchase, and it’s launching weekend deals beginning Nov. 11. The company will reveal deals in the week ahead via social media, TV ads and in-store signage, it said. REDcard holders will be able to check out using a new mobile wallet service in the Target app with a scan of their phone beginning in November, it said. In Target's Minneapolis home base, customers can use the drive-up service to pick up orders without having to go in store.
Best Buy is the "the market maker in 4K television," said Mike Mohan, chief merchandising and marketing officer, during its investor day Tuesday. Its buying team has worked with TV vendors to make sure connectivity and compatibility features of vendors' TVs match "our standards," Mohan said, "not the vendors' technical standards, because we knew what would happen if it was done incorrectly." If vendors wanted to be in Best Buy four years ago, "you had to go through a gauntlet that our merchant team put together," he said. "Those are now the de facto standards in the industry for all 4K televisions." The retailer's buying teams understand the importance of "panel costing and availability," said Mohan, which enabled it to increase demand and "bring larger screens to market sooner," because it understands "the balances between those who make panels and those who assemble the sets." Bsest Buy complemented its work with vendors with marketing efforts to tell consumers who had recently upgraded to HDTV "why 4K TV was better even if you didn't have a 4K signal," he said. Thursday, meanwhile, Best Buy sent an email blast to customers spotlighting a $359 starting price for big-screen 4K TVs. The $359 leader, a 49-inch TCL Roku TV, was followed by a 50-inch Sharp 4K smart TV at $399, for savings of $100. The lowest 4K TV price went to Sharp for a midsize 43-inch model at $329, and Best Buy shaved $70 from the price of its private-label Insignia 50-inch 4K TV, bringing it to $379. Tier one TVs showed discounts, too. Best Buy chopped the price of an LG 49-inch 4K smart TV by $250, bringing it to a cart price of $449, below LG’s minimum advertised price.
Department store chain Kohl’s will begin offering free returns for Amazon customers in 82 stores in Chicago and Los Angeles next month, it announced Tuesday. The news follows another alliance the retailer announced this month with Amazon (see 1709060067) to open 10 stores, also in Chicago and Los Angeles, that will house dedicated 1,000-square-foot Amazon smart home experience spaces beginning next month. Staffers at Amazon Returns at Kohl’s, meanwhile, will pack and ship eligible Amazon return items for free “regardless of return reason and regardless of whether the items are packaged for shipping,” said the retailer. Kohl's will package and transport all returned items to Amazon return centers. As added incentive, customers using the services can use designated parking spots near the store’s entrance, it said.