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Amazon continues shoveling dirt on Barnes & Noble’s grave

November 26th, 2013 at 12:40 PM

Barnes & Noble remains in dire straits, which is no surprise. What does come as a shock is that the bookstore chain has abruptly decided not to split its retail operations from its star-crossed Nook division. The company has mulled over the split for 18 months, but opted not to pull the trigger. B&N is pretty much a text-book case of a corporation paralyzed by steep and apparently irreversible decline. Nook sales, which were once the only hope for future growth, are now declining at a disastrous 32% clip. Amazon’s Kindle product range is simply devouring the Nook alive.

B&N is doing a good job with cost cutting: The company is still profitable because it is closing stores and laying off people just fast enough to stay above water. But slashing costs  by itself is not a long-term blueprint for viability, especially when retail revenue is dropping at a 7.5% pace. B&N will need a completely new strategic vision to have any hope of survival.

What could that be? Turning stores into 3D manufacturing hubs or gaming centers? Kidnapping J.K. Rowling and forcing her to crank out a new Harry Potter sequel every seven months? It’s hard to see a way out.

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