Barnes and Noble Case Study

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Management Project

10th of december 2010
History

In 1873, Charles Barnes opened a book-printing business in the USA. The first bookstore was set up by his son, William, in partnership with G. Clifford Noble, in 1917 in New York and it is the advent of Barnes and Noble. In 1932, at the height of the Great Depression, the bookstore was moved to its current location on Fifth Avenue. Barnes & Noble was acquired by Leonard Riggio in 1971, who oversaw the growth of the business. Leonard Riggio, the company's chairman, began his bookselling career while attending New York University in the early 1960s.  Working as a clerk in the university bookstore, he became convinced that he could do a better job serving students, and he opened a competing store of his own.  With a small investment, Mr. Riggio established the Student Book Exchange (SBX) in Manhattan's Greenwich Village in 1965.  The store quickly became one of New York’s finest bookstores, known for its knowledgeable staff, wide selection and great service. In 1974, Barnes & Noble became the first bookstore to advertise on television. In 1975, the company became the first bookseller in America to discount books, by selling New York Times best-selling titles at 40% off the publishers’ list price. During the 1970s and 1980s, Barnes & Noble opened smaller discount stores, which were eventually phased out in favor of larger stores. They also began to publish their own books to be sold to mail-order customers, enabling them mail-order to reach new customers nationwide through mail-order catalogues. In 1979 Barnes & Noble acquired a chain of retail stores called Bookmasters, and then bought up Marboro Books Inc., a remainder company with discount retail outlets. Barnes & Noble continued to expand throughout the 1980s, and in 1987, the company made its largest acquisition when it purchased B. Dalton Bookseller from Dayton Hudson.  This acquisition of 797 retail bookstores thrust the company onto the national scene, making Barnes & Noble a nationwide retailer overnight and the second-largest bookseller in America.  The company also acquired Doubleday Book Shops from the Bertelsmann Company and the rights to the Scribner’s bookstore trade name from Macmillan. Barnes & Noble purchased BookStop, a company operating discount book superstores in Texas, in 1989.  This acquisition gave the company key insights into the ingredients behind a successful superstore strategy, from real estate to operations to marketing and merchandising. In the late 1980s, Barnes & Noble tested selling books online in an early generation venue called Trintex, a joint venture with IBM.   In the early 1990s, the company refined its superstore concept and established the modern generation of Barnes & Noble superstores, which today represent over 96 percent of their retail sales. Barnes & Noble became a publicly traded company in 1993, listed in New York Stock Exchange. In the mid-1990s, it sold books on CompuServe and later opened a full-fledged book superstore on America Online in March 1997.  Before Barnes & Noble created its web site, it sold books directly to customers through mail-order catalogs. It first began selling books online in the late 1980s, but the company’s website was not launched until May 1997. According to the site, it now carries over 1 million titles, as well as a vast selection of music CDs and DVDs. (5) In the beginning of the millenium the company has made two acquisitions that expanded its publishing capability.  * In 2001, Barnes & Noble purchased SparkNotes.com, a leading study aids website, offering free online access to literature notes and more than 1,000 study guides on everything from literature to chemistry to computer science. SparkNotes converted its top study guides into print publications, and they have rapidly become bestsellers. * In 2003, Barnes & Noble purchased Sterling Publishing. For 60 years,...
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