In a first quarter earnings call, Barnes & Noble indicated that it was contemplating the purchase of Borders Books. They didn’t just come out and say this but it’s pretty easy to decipher the doublespeak and read between the lines.
The retailer also said it has put together a team of senior executives and financial advisers to study “the feasibility of a transaction” with rival Borders Group Inc, but it declined to say if it had been contacted by Borders’ bankers.
The feasibility of a transaction? Oy! Translation: We’re thinking of buying Borders Books.
Not to be outdone, Borders responded with a marketing masterpiece.
Borders issued a statement on Thursday saying that the company is “in the midst of the strategic alternatives process and has not engaged in substantive discussions regarding any specific transaction to date.”
As a marketer I can spot gems like these a mile away. Translation: We’re looking for some way out of this mess and haven’t had the big talk with Barnes & Noble. Sure, maybe a few conversations here and there and a coffee or two but it’s nothing serious, it’s totally casual … so far.
So the strange mating dance seems likely to continue.
Perhaps this news was meant to distract from Barnes & Noble’s first quarter earnings. They came in on the low end of guidance, with sales edging up 1.1% but same store sales decreasing 1.5%. At some point you can’t rely on new store openings. However, congratulations are in order to BN.com who posted a 7.2% increase.
Of particular interest to me was the following statement:
During the first quarter Barnes & Noble reached an agreement in principle with the State of California (subject to final Board of Equalization review and approval expected at the end of May) to settle its long-standing dispute regarding the collection of sales and use taxes on sales made by Barnes & Noble.com from 1999 to 2005. As a result, the company recorded a one-time pre-tax charge of approximately $8.3 million.
Here’s hoping California puts this money into public libraries or education.
Finally, Barnes & Noble blames J.K. Rowling for their expected second quarter downturn.
Additionally, due to the difficult comparison against last yearâ€™s July release of Harry Potter and the Deathly Hallows, second quarter comparable store sales are expected to decrease in the low to mid-single digits.
I know it’s true, but it all sounds a bit whiny and juvenile. “Couldn’t you write another book? Pleeeeeeaase?!”
Will Barnes & Noble buy Borders Books? I’m guessing they will, providing bookstore homogenization throughout the USA.