Edited by: TJVNews.com
Since the unexpected intrusion into our lives of the dreaded coronavirus in March of this year, universities and colleges across the country were among the first educational institutions to get on track with remote learning, which has now become a ubiquitous phenomenon.
As a result of campuses closing their doors to in-person instruction, many college affiliates such as book stores were also forced to cut corners.
According to a recent report in the Wall Street Journal, Barnes & Noble Education, Inc has had no choice but to keep some of its outlets closed. The campus bookstore chain’s chief financial officer, Thomas Donohue has been reducing operational costs since the inception of the Covid virus, according to the WSJ article.
Barnes & Noble Education, located in Basking Ridge, New Jersey operates over 760 stores on college campuses in the U.S, as was reported by the WSJ. Because their student clientele are no longer on campus to purchase books or to attend sporting events, sales of textbooks, t-shirts and team merchandise has taken a drastic nosedive.
B&N Education responded to this predicament by implementing a variety of cost-saving measures which include “furloughing and laying off an undisclosed number of employees, “ according to the WSJ report. Prior to laying off staff, B&N Education had approximately 5500 employees as of May 2nd. Subsequently, the book store chain closed all of its locations on a temporary basis. 52 stores are still shuttered as of today due to restrictions imposed by regional and state authorities, according to the WSJ report.
The WSJ reported that during the fiscal quarter ending October 31st of this year, Barnes & Noble Education saw its profits plummet by 79.1% to $7.5 million. B&N Education spun off from Barnes & Noble in 2015.
Moreover, WSJ reported that sales declined by 22.9% to $595.5 million during the period, another bad quarter after sales fell 36.2% in the period ended Aug. 1.
While Barnes & Noble Education still maintains a fully functional web site that is chock full of books and other collegiate items, it appears that the lion’s share of the revenue that they generate each year mainly emanates from their bricks and mortar stores, according to the WSJ report.
As it looks right now, some universities across the U.S. expect it will take until the fall of 2021 for students to return to in-person instruction on their respective college campuses, according to the WSJ report.
Because college students are low on the totem pole as it pertains to when they will be allowed to get vaccinated, it could take an inordinate amount of time for them to completely return to pre-corona life on campus.
Donahue now has to remain vigilant about the reduction of operating expenses until a normalization of sorts returns to campuses. Sales will not recover until campuses are humming with students and bookstores and student cafes can reopen. Donahue told the WSJ that the first month of a new semester is when Barnes & Noble Education usually generates the most annual revenue.
While additional job reductions are not expected, Donahue said that he will be looking into shaving the fees that Barnes & Noble Education remits to colleges and universities that house their stores, as was reported by the WSJ. The company has a profit sharing program with the schools that they serve and rent payments are part of the business agreement. The WSJ reported that in its most recent quarter Barnes & Noble Education spent $368.7 million on lease payments. No permanent closures of their stores have been instituted.
Challenges concerning inventory has also been a matter that the company has to deal with because of the significantly decreased demand for the items that they normally sell. “If they run out of inventory in certain areas, they need to be able to fulfill any sales orders that come in pretty quickly and within a couple of weeks at most,” said Ryan MacDonald, a senior analyst at investment bank Needham & Company LLC.
The company, however has every intention of investing in the company’s digital businesses, including its bartleby learning service, which offers homework help and writing resources. Barnes & Noble Education operates 671 customized digital bookstores for colleges and schools, selling, for example, e-book devices and digital media, according to the WSJ report.
