The brothers McDonald, Mr. Barnes, & Mr. Noble.
So,
[*sigh*]
OK, so everyone in publishing and book retail and certain investors & investor groups and of course, Barnes & Noble employees (& I’m sure, other booksellers) have been looking at and looking into the current skerfluffle happening with Barnes & Noble stock.
I’ll note here: this is only about the stock. While ownership of stock does at least theoretically correspond to ownership of the company, ownership of the stock doesn’t run the stores, doesn’t affect the appetite or enthusiasm of the shopping public for books, and doesn’t reflect, affect, or deflect the much larger trends in both publishing and street-level retail sales of physical goods —
…and any goober with a pile of cash can buy stock; If you have enough cash, you can buy a lot of stock:
while possession of money is seen as a virtue in our current [western, capitalist, greedy, consumerist, commoditized&packaged-for-sale] society, usually big money only derives from one of three sources:
you’re lucky, you’re ruthless, or you’re really, really smart.
(Not all smart people are rich, mind you. Some luck/greed/ruthlessness also usually is a factor)
& While some smart people are rich, possession of cash is not a guarantor of either general intelligence or business acumen. The ability to buy a thing does not correspond to the knowledge of the proper use of the thing. The ability to buy a company’s stock on the open market only has one meaning:
You have money.
##
Meanwhile, the knowledge needed to run a single bookstore, or a city-wide chain of a dozen bookstores, or a regional player with multiple dozens of bookstores — or a nation-wide chain of bookstores with hundreds of stores, millions of books, billions of dollars in sales, and a website and ancillary sales [* see below] – seriously, Dude: just because one can buy a stock doesn’t mean one knows jack about how that business is run.
Bookselling, these days, isn’t about selling books. I hate it, you don’t understand it, and it makes no sense. And now, I have to explain it to you.
[here’s the important bit]
With the transition of bookstores from the local independent retailers of the 60s to the major retail chains of the 90s and today, there was also a shift in mindset, from the sale of books as books – to the sale of books as just another retail commodity
[/important bit]
If one’s mission statement is to operate the “best specialty retail business in America” (& that has been and is still B&N’s mission statement) then you open yourself up for all kinds of distractions
* (CDs, DVDs, audio books, stationary, calendars, stuffed animals, bookmarks, journals, board games, book lights, magnifying glasses, reading glasses, tchotchkes, coffee mugs, coffee, and a whole lot of crap non-book merchandise that I have to deal with, on a daily basis, as a corporately-owned bookseller) —
Retail is broad, open, messy, and undefined. The exchange of goods for money includes things like prostitution, the grey market, the black market, street-corner drug dealers, human trafficking; the sales of pelts, horns, organs, meat, glands, other derivatives & messy bits of endangered species; or of the mere rights to buy and sell something, whether one actually owns said somethings before the rights to buy and sell them are extended to the open market.
“Retail” ideally means I actually have the item, here, in a store on a shelf, and I can sell it to you. It hasn’t actually meant this for decades, perhaps enough decades to constitute centuries.
“Oh, sure, I’ll have that in next week; if you pay for it today, I’ll hold it for you as soon as it comes in.”
This statement is not only a supporting pillar of retail bookstores, it is the bald lie that all online retail is built upon. — key quote: “Oh, sure, I can get that to you next week.”
Promises, Promises.
##
I’ll take a step back from retail theory [while once again noting that investors, particularly investors of the scale that take “ownership stakes” should endeavour to educate themselves about the companies they buy and sell like Monopoly™ gameboard spaces] to get back to what I originally wanted to comment on:
See, there’s this guy with a lot of money, who is trying to buy up quite a bit of the company I work for [whatever beef I have with current management, it is still the company I work for] and he’s filing lawsuits, haranguing stock-holders, whining, complaining, and generally distracting major stake holders, the board, the management, and the shopping public (at least those who read financial mags and newspapers) from the business of the company: the exchange of dollars for words.
And, as stated, while I have my own beef with current ownership and management, this dude Burkle isn’t helping.
The latest newsworthy bit is that Burkle is bitching that current management is using “Company resources and the company’s internal communications systems on multiple occasions to solicit votes for Leonard Riggio and his hand-picked nominees to the Board of Directors”
Here, let me state something Burkle doesn’t know and is piling much grief upon: All official press releases of my employer, Barnes & Noble, are also distributed to all employees (stockholders or not) via an intranet known as “Barnes & Noble Inside” — the letters of Len Riggio and William Lynch were also official B&N press releases, & official company statements, in as much as they are addressed to everyone and propagated to Businesswire.com (the same host for Burkle’s press releases) & also barnesandnobleinc.com [the official corporate site] before they were made available to employees of Barnes & Noble, whether they are shareholders, management, or just the folks I have working part time on a register to help me through the weekends. If any statement from Corporate has been made public through other channels, we like to be sure our employees can read it as well.
Thus, Burkle is complaining that B&N makes official B&N press releases easily available to all B&N employees. Pray tell, what should they do otherwise, if this is wrong?
Burkle – as a shareholder – can bitch that he doesn’t has access to internal B&N communications, but since he holds no executive position in B&N, he has no basis to complain:
If he would care to submit a resume and application to Barnes & Noble, for a specific job in our organization (“owner” isn’t available; & “owner” means nothing, contributes nothing, and doesn’t sell books) then I’m sure we can re-evaluate his standing and address some of his complaints.
##
Instead I’m going to call him out on his research.
[Here I’ll insert a link to the wikipedia entry on McDonalds — not that micky-d’s is immediately germane to the discussion of book retail, but I want to plant that seed in your head, before I get to my conclusion.]
##
In his letter to B&N employees Burkle shows his ignorance at least a dozen times, but I’ll pull just a few:
“Leonard Riggio isn’t a Barnes or a Noble, but he considers himself THE founder because he writes the history. The Barnes & Noble company’s roots go back over a century and its history is full of innovation. Many of Leonard Riggio’s businesses can trace their history to these families.”
“Leonard Riggio doesn’t want anyone else in his story. Not the Barnes family, the Noble family or even the shareholders. Over the years, he charged the Company over $32 million dollars just to use the Barnes & Noble name, but he doesn’t invite members of the Barnes family or the Noble family to cut the ribbons at store openings. He believes this is his company…except he doesn’t own it…not even half of it…but he acts like he does. Until just a couple of years ago he owned about as much as Yucaipa does.”
“Barnes & Noble has been around over 100 years. If it’s allowed to operate with good governance and without conflicts of interest that have siphoned off billions of dollars into transactions that have benefited Leonard Riggio and his family, I believe it can be around for another 100 years.”
Here’s your history, and I can quote Wikipedia — and while that doesn’t mean it’s true, it certainly means anyone with scant minutes could “verify” these facts:
“Barnes” was Charles Barnes who began a book printing (not book retail) business in 1873. He was based out of Wheaton, Illinois — not New York, a publisher not a retailer, and soon to fade to black if it weren’t for…
His son, William Barnes: who entered into a partnership with G. Clifford Noble in 1917 to open up a physical bookstore in New York — not more than 100 years ago, Mr. Burkle, but merely 93 years past.
For someone as detail oriented as you, Mr. Burkle, who specifically called out the members of “the Barnes family or the Noble family” in your letter, I’m surprised you missed this point. Even at it’s inception, no matter the name, the bookstore that became the Barnes & Noble chain was more than the sum of it’s parts, more than a mere congregation of names, and 40 years removed (in 1917) from “Barnes” the publisher —
What is now known as the “flagship” Barnes & Noble bookstore only opened on 18th & Fifth in 1932.
The bookstore, the business, the brand name; Barnes & Noble was purchased by Leonard Riggio in 1971. While Ronald Burkle would love to characterise this as a late development in the long, storied B&N history, in fact, this is just when B&N as a national brand was started.
##
In Burkle’s version [and likely also the general public perception] “Mr. Barnes” & “Mr. Noble” worked for 80 years to build a company that by the 1970s was an established New York bookseller that was then bought out by Riggio, but everything you know or think you know about B&N leading up to that point is likely wrong.
Mr. Noble exits the picture in 1929, before the “flagship” bookstore [the proto-big-box that later was a model for the whole chain] even opened, & the last Barnes who ran B&N died in 1969 and at that point the company was sold to Amtel, which as a conglomerate had all kinds of product lines, but didn’t know books. The book division quickly declined, and Amtel was looking to sell.
In 1971, Len Riggio already owned 10 bookstores — having started his own bookstore business 6 years prior at the age of 24 — and the research I’ve done points toward Barnes & Noble only having 4 branches at that point, though the 5th Avenue store was certainly a landmark and among the largest bookstores anywhere. After Riggio bought the name (& the company that went along with it) he immediately rebranded his 10 college bookstores with the B&N moniker. Len Riggio came to B&N with bookselling experience and more locations than the stores he purchased in 1971. Sure, “Barnes & Noble” began—in one way—in 1873, and the original bookstore opened in 1917, but the company that is now a massive corporation began in 1965 when a 24-year-old bookseller started his own chain of independent college bookstores. The name you and I now know that company by came later, and was purchased on the cheap (just $750,000) and bought second hand — since Noble had left 42 years prior and John Barnes [grandson of William, the founder] was 2 years dead.
Given Riggio’s background — and also, the past retail and distribution activities of the pre-1971-B&N — Barnes & Noble was primarily a college bookseller throughout the 70s and early 80s. Starting in the late 70s, though, B&N began acquiring other book store chains leading up to the 1986 acquisition of B. Dalton, a nation-wide chain with close to 800 stores.
For more detail, I’d heartily recommend the well-researched article at fundinguniverse.com — which took me all of 5 seconds to find via a Google search, and I don’t even own 20% of the company.
And for more information on how bookstores changed from local retailers to big box superstores, I’ll point you to my first Rethinking the Box Column.
##
The Brothers MacDonald opened a restaurant in 1940 in San Bernardino, California. Their name is all over the burger franchise that now dominates the planet. But heirs and descendants of that particular “McDonalds” clan have nothing to do with the fast-food empire that serves us hot apple pies and meat nuggets of dubious origin
Ray Kroc is the businessman who took a single idea (burgers and fries, in this case) to a billions-of-dollars market-leading business.
“Barnes” and “Noble” both deserve their place in the history of bookselling, and on wikipedia, and both on the store-front signs and in the minds (& hearts?) of book lovers everywhere.
But Barnes & Noble as a company was built from scratch by Len Riggio, and he was well on his way toward his goals even before he bought the B&N name.
##
And booksellers are smart cookies; we know how to use the internet, and quite a few of us are skilled at research as well. On top of that, those of us who are stockholders-of-record have received — [*sigh*] do not doubt we’ve received — multiple communications from both sides and honestly, we’re all a little sick of the whole thing.
Mr. Burkle, your side of the story got out. You didn’t need to throw out a last-minute smear against current B&N management about censorship or insider boosterism.
I’ll note, as a Barnes & Noble employee, I did see some some internal communications noting that the deadline for proxy votes for the shareholder’s meeting was approaching — but these were presented to me as informational statements, that I needed to submit either the gold or white proxy card by a certain date, and not as exhortations to vote the company line.
Any propaganda from the company to support the company were first sent out as official press releases, and merely repeated via internal channels, so it’s likely you saw all of these statements before I did.
##
At this late date I believe the point is moot. All deadlines are past, all shareholders have cast their vote. We’re waiting for the shareholder’s meeting on Tuesday (28 September) and I’m not sure if we’ll know immediately what the results are — my vague recollection of SEC filing rules may give the company four business days before they have to report the results of the voting — but given the stakes and the public scrutiny I expect there will be PR from both sides coming out after the markets close on Tuesday.
It doesn’t matter anyway. 3 board members out of 9 won’t change any votes, and doesn’t change any of the company executives who run the company day-to-day, and who have already made plans for the rest of this year and likely most of the next.
Barnes & Noble’s Holiday and Digital strategy for 2009 is already cast — not set in stone but formed in fairly durable plastic (wrapped around the electronic guts of an e-book reader). The battle for ownership of the shares, and all this grumbling and rumbling, is a distraction that *I* certainly didn’t need, as much of my energy and both mental and physical effort should have been poured into the bookstore as we prepare for December (and it’s tougher this year than any I’ve worked yet) — and also constitutes an expense for the company – as we have to publicly conduct this exercise; what is essentially a bigger-dick contest between Riggio & Burkle with some bearing on what B&N looks like in 5 years, but doesn’t do anything to explain, ameliorate, or resolve Problems in Publishing and Book Retail which affect my business but which is due to much larger culture and technological shifts.
It’s like the passengers voting on which lifeboat to take, as we all prepare to debark from the Titanic — yeah, sure, we can make this a point of debate and if one insists and yells with sufficient volume, it certainly seems like it matters, but there are larger issues.
And while a couple of first-class passengers shout at each other about whether the port or starboard side is better, us working proles are making our way to whichever lifeboat is closest – and it’s women, children and booksellers first.
##
This post is not a defence of Len Riggio: I personally think that Len is a dick, and suffers from a napoleon complex. The whole B&N College vs Barnes & Noble [retail] split prior to the 1993 B&N stock IPO was a classic dick-move, and I’ve commented at length about it.
The continued and continuing quarterly dividend payment is one point that really sticks in my craw [in a depression! and while the company loses money!] on top of the fact that B&N had to pay a half billion to re-acquire the B&N name from Riggio’s pocket College Bookstore Company (though the purchase also included 700 or so college bookstores — and full ownership of the brand and reunification of the two Barnes & Noble companies is a big plus… but) shows that Riggio is shrewd, if nothing else, and protective of what he sees as his.
But if one were to ask me who I’d trust a bookstore to:
I’m backing Len, and Burkle can skip and go eff himself.
