DOCSLIB.ORG

When Chuck Conaway Took Over As the Chief Executive of Kmart, He

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
When Chuck Conaway Took Over As the Chief Executive of Kmart, He Code Blue BY DAVID F. CARR AND EDWARD CONE When Chuck Conaway took over as the chief executive of Kmart, he gave himself two years to resuscitate the discount retailer, get the right prod- ucts on its shelves and make it com- petitive again with the new kings of general merchandising, Wal-Mart and Target. His No. 1 repair job, he said at the time, was the company’s supply chain. He has 243 days to go. PHOTO ILLUSTRATION BY HUGH KRETSCHMER DURING THE LAST DECADE, KMART’S NET INCOME HAS FLUCTUATED WIDELY (RIGHT). BASELINE NOVEMBER/DECEMBER 2001 CEO CHUCK CONAWAY IS TRYING TO 30 PRODUCE A FAST, STEADY RECOVERY. CASE 005 A DISSECTION 21185136467523256485195635736354485932643456395465306577367561254362745792315769234854716547856456476574196548165684 CASE 005 ADISSECTION K-MART BASE CASE Company: Kmart Headquarters: 3100 West Big Beaver Road, Troy, Mich. Phone Number: (248) 463-1000 Business: Discount retailer of clothes, pharmaceuticals, general merchandise Financials: $37 billion in sales, net loss of $244 million, net loss margin 6.6% (fiscal year 2001) Chief Information Officer: Position open Challenges: Fill shelves with most popular products while still in demand; lower pricing; reduce advertising expenditures while maintaining marketing impact; reduce costs; refocus stores to serve needs of mothers rearing children Baseline Goals: Fix business and “make it competitive” by Aug. 10, 2002 Keep right products in stock 95% of time, up from 86% Provide “super” service in 70% of stores, up from 56% Turn inventory 4.5 times a year or more, up from 3.6 times September 6 may go down as a defining date in Kmart chief executive Chuck Conaway’s effort to turn around the one-time king of discount stores in America. Five days before the twin towers tragedy, Conaway announced that Kmart would write off $195 million of assets held on its books that no longer had val- goal he established shortly after he was hired in May 2000. ue. This included $130 million worth of supply-chain hardware He doesn’t expect to completely fix the supply chain by and software that was being retired, and $65 million for the re- this coming August. But, in a Nov. 27 conference with Wall placement of two outdated distribution centers. Conaway said Street analysts, Conaway said Kmart was “doing a phenom- implementing two new state-of-the-art distribution centers enal job of reinventing’’ its supply chain—and that should be would allow hot-selling products to get priority treatment. evident by this time next year. The technology write-offs were a sign that Kmart was The revitalization from being able to put popular products scrapping some relatively recent investments, and even on its shelves at competitive prices can come none too soon. called into question Kmart’s sweeping plan to work with In the quarter that ended Oct. 31, Kmart’s sales actually once high-flying i2 Technologies to overhaul its supply chain. dropped 2.2% from a year ago, to $8.0 billion. Even disregard- Whether the restructuring and write-offs announced ing the writeoffs, the company reported a net loss of $127 mil- that day defined success or failure remains to be seen. But lion, while rivals were showing profits and sales gains. Conaway was, if nothing else, putting himself on the spot. How Kmart gets products onto shelves is not its only He had just 337 days to go. challenge. Conaway also is fighting to create a “customer- On Aug. 10, 2000, Conaway had set his first major met- centric’’ culture and to market more effectively, besides ric for judging the success of his attempt to revive Kmart. He pulling people into the store with Sunday circulars. said it would take 730 days—two years—to make Kmart But he has told shareholders, employees, analysts and his again competitive with Wal-Mart, which had stolen Kmart’s board that the supply chain is his No. 1 priority . seeming birthright as the largest discount chain in 1990, and “I believe the supply chain is really the Achilles’ heel of Target, which was about to sweep by Kmart to become the Kmart,’’ he said in September. “Just fixing the supply chain nation’s second-largest discounter. could really turbo-charge Kmart.” Setting concrete goals and meeting them is key to September’s writeoff says a good portion of what the com- Conaway’s method of achieving success for Kmart. “Chuck pany spent in recent years on such technology is not deemed aggressively measures progress. If he’s not seeing it, he’s not useful any more. If this is a final clearing of the decks to make against pulling the plug,” says one consultant who has way for new systems, Conaway’s ambitious plan could be suc- worked on Kmart’s logistics systems. ceeding. But success is not yet visible to outsiders. “They are not dead yet, but for Kmart to get back in the game GOAL: FIXING THE ACHILLES’ HEEL would be one of the greatest miracle comebacks, ever,” says Larry Which leads back to Sept. 6. Schulsinger, retailing analyst with Management Ventures in Conaway, the 40-year-old boy wonder brought in from Wa shington. “The world can exist with more than two large mass drug chain CVS to revive Kmart’s fortunes, has staked his merchandisers, and Chuck is smart enough to figure out a way two-year recovery plan on revamping the company’s supply to do it. But if the story ended today, they have lost.” BASELINE NOVEMBER/DECEMBER 2001 chain and inventory management systems. It’s the biggest Fourteen months ago, Kmart placed a big bet on i2 32 part of “achieving world-class execution,” the number one Technologies as the strategic partner that would turn its 21185136467523256485195635736354485932643456395465306577367561254362745792315 perennially underperforming supply chain into an advan- THE KMART ROSTER tage. “This represents about a $50 million opportunity— just in the beginning—for i2, and there is a tremendous Charles C. Conaway PARTNERS amount of more work we’re going to do,” Conaway en- Chairman and CEO Gregory A. Brady thused onstage at an Oct. 2000 i2 user conference. Role: Conaway is the driving CEO, i2 Technologies force behind Role: Brady joined i2 as The stakes are huge. Gary Busek, who studies retail tech- Kmart’s initia- president in nology as president of IHL Consulting Group, estimates tives to overhaul 1994. When he Kmart could add $1.9 billion to its bottom line if it could match its supply chain, was promoted improve cus- to CEO in May the inventory turnover rates achieved by Wal-Mart and Target. tomer service, 2001, a big part The number of times a company turns over the invento- and market more of his mandate ry in its stores and distribution network each year is a par- effectively. He joined Kmart was to ensure in May 2000 from CVS Corp., customer satisfaction with ticularly crucial metric in discount retail, which thrives on where he was president and i2 products. Brady reportedly high volume. Last year, Wal-Mart turned its inventory 7.3 chief operating officer. had a hand in making the sale to Kmart in the first times; Target turned its 6.3 times; Kmart: 3.6 times. And Mark Schwartz place. Before joining i2, chief financial officer John McDonald says turnover will be President and COO he was VP of Worldwide flat, at that same rate, again this year. Role: A Wal-Mart veteran, Applications for Oracle Corp. Schwartz joined Kmart n Ultimately, i2 is supposed to help Kmart achieve such ba- September 2000 and was John West sic retail goals as keeping the shelves sufficiently stocked so promoted to his current post Formerly CTO, i2 that customers can find what they need, but without stuff- in March 2001. Schwartz has Technologies taken the lead on initiatives Role: West consulted with ing stores with an excess of inventory that Kmart can’t move. such as shortening checkout the Kmart proj- Some of the ways i2 software can help is modeling de- lines and clearing out excess ect team on po- inventory. tential changes mand for products—and what it means for keeping inven- to i2’s software, tory in stock at each store and each distribution center. The Randy Allen templates and software keeps track of the ability of key suppliers to fill or- Executive Vice President of best-practices Strategic Initiatives and guidelines that ders, and the cost and speed of different means of trans- Chief Diversity Officer could improve the retailer’s porting goods through the network. Role: Allen was hired as chance of success. Recently, After needs are analyzed, then instructions can be gener- Kmart’s CIO in September i2 announced West had 2000 but moved to her “elected to reduce his cur- ated for executing orders, scheduling shipments, and record- current post in August 2001. rent time commitment to the ing the receipt of goods. If the analysis is correct and execution A former partner at Deloitte company” but would remain Consulting, Allen was on in an advisory capacity. follows, costs of operating the network are lower and the com- central to Kmart’s selection pany doesn’t have to stock as much inventory either in distri- of i2 Technologies as a Mark S. Hansen bution centers or in stores. That, in turn, means Kmart can supply chain technology Chairman and CEO, partner. She brought in Fleming Companies lower prices and thereby raise sales and, hopefully, profits. Deloitte personnel to tailor Role: Hansen is a former The Kmart partnership was a big deal for i2, based in it to Kmart’s needs. president and CEO of Sam’s Dallas. I2 claims to have delivered billions of dollars of val- Club, the warehouse division Tony D’Onofrio of Wal-Mart Stores.
Load more

Recommended publications
  • The Retail Sector on Long Island Overlooked… Undervalued… Essential!
    The Retail Sector on Long Island Overlooked… Undervalued… Essential! A Preliminary Report from the Long Island Business Council May 2021 Long Island “ L I ” The Sign of Success 2 | The Retail Sector on Long Island: Overlooked, Undervalued, Essential! Long Island Business Council Mission Statement The Long Island Business Council (LIBC) is a collaborative organization working to advocate for and assist the business community and related stakeholders. LIBC will create an open dialogue with key stakeholder groups and individuals to foster solutions to regional and local economic challenges. LIBC will serve as a community-focused enterprise that will work with strategic partners in government, business, education, nonprofit and civic sectors to foster a vibrant business climate, sustainable economic growth and an inclusive and shared prosperity that advances business attraction, creation, retention and expansion; and enhances: • Access to relevant markets (local, regional, national, global); • Access to a qualified workforce (credentialed workforce; responsive education & training); • Access to business/economic resources; • Access to and expansion of the regional supply chain; • A culture of innovation; • Commitment to best practices and ethical operations; • Adaptability, resiliency and diversity of regional markets to respond to emerging trends; • Navigability of the regulatory environment; • Availability of supportive infrastructure; • An attractive regional quality of life © 2021 LONG ISLAND BUSINESS COUNCIL (516) 794-2510 [email protected]
    [Show full text]
  • Faulkner's Wake: the Emergence of Literary Oxford
    University of Mississippi eGrove Honors College (Sally McDonnell Barksdale Honors Theses Honors College) 2004 Faulkner's Wake: The Emergence of Literary Oxford John Louis Fuller Follow this and additional works at: https://egrove.olemiss.edu/hon_thesis Recommended Citation Fuller, John Louis, "Faulkner's Wake: The Emergence of Literary Oxford" (2004). Honors Theses. 2005. https://egrove.olemiss.edu/hon_thesis/2005 This Undergraduate Thesis is brought to you for free and open access by the Honors College (Sally McDonnell Barksdale Honors College) at eGrove. It has been accepted for inclusion in Honors Theses by an authorized administrator of eGrove. For more information, please contact [email protected]. Faulkner’s Wake: The Emergence of Literary Oxford Bv John L. Fuller A thesis submitted to the faculty of The University of Mississippi in partial fulfillment of the requirements of the Sally McDonnell Barksdale Honors College. Oxford April 2005 Advisor; Dr. Judson D. Wafson -7 ■ / ^—- Reader: Dr. Benjamin F. Fisher y. Reader: Dr. Andrew P. D^rffms Copyright © by John L. Fuller All Rights Reserved 1 For my parents Contents Abstract 5 I The Beginnings 9 (4Tell About the South 18 A Literary Awakening 25 II If You Build It, They Will Come 35 An Interview with Pochard Howorth 44Football, Faulkner, and Friends 57 An Interview with Barry Hannah Advancing Oxford’s Message 75 An Interview with Ann J. Abadie Oxford Tom 99 An Interview with Tom Franklin III Literary Grounds 117 Works cited 120 Abstract The genesis of this project was a commercial I saw on television advertising the University of Mississippi. “Is it the words that capture a place, or the place that captures the words?” noted actor and Mississippi native Morgan Freeman asked.
    [Show full text]
  • Scrip Order Form
    St. Thomas Aquinas SCRIP ORDER FORM Thank you! Your support is greatly appreciated! Please remember that we can sell only the amounts listed on the order form. Name:_______________________________________________Phone:___________________Date:_______________ Check# :_________________Amount:__________________ * Please make checks payable to: St. Thomas Aquinas * Filled by__________NEEDS:________________________________________________________________________ Retailer Profit Card Qty. Total Retailer Profit Card Qty. Total (c.o.a.) = certificate on account for Amount (c.o.a.) = certificate on for Amount school account school $5.00 $100 Claire’s $0.90 $10 All Seasons Gutter/New All Seasons Gutter/Topper $10.00 $100 Cold Stone $0.80 $10 Creamery American Eagle Outfitters $2.00 $25 Courtyard/Marriott $6.00 $50 Applebees $2.00 $25 Critter $0.50 $10 Nation(Dyvig’s) Arby’s $0.80 $10 Barnes & Noble/B. Dalton $1.00 $10 Derry Auto (c.o.a.) $1.00 $25 Barnes & Noble/B. Dalton $2.50 $25 Derry Auto (c.o.a.) $2.50 $50 Bath and Body Works $1.30 $10 Derry Auto (c.o.a.) $5.00 $100 Bath and Body Works $3.25 $25 Dillard’s $2.25 $25 Bed, Bath and Beyond $1.75 $25 Dress Barn $2.00 $25 Best Buy $0.50 $25 Express $2.50 $25 Best Buy $2.00 $100 Fareway $0.50 $25 Big Time Cinema (Fridley’s) $1.00 $10 Fareway $1.00 $50 Borders/Waldenbooks $0.90 $10 Fareway $2.00 $100 Borders/Waldenbooks $2.25 $25 Fairfield Inn/Marriott $6.00 $50 Build-A-Bear $2.00 $25 Fazoli’s $1.75 $25 Burger King $0.50 $10 Finish Line $2.50 $25 Cabela’s $3.25 $25 Flower Cart (c.o.a.) $1.25 $25 Carlos O’Kelly $0.90 $10 Foot Locker $2.25 $25 Casey’s $0.30 $10 Fuhs Pastry $1.00 $10 Casey’s $0.75 $25 Gap/Old $2.25 $25 Navy/Banana Republic Casey’s $1.50 $50 GameStop $0.75 $25 Cheesecake Factory $1.25 $25 Gerber’s (c.o.a.) $2.50 $50 Chili’s/Macaroni Grill/On the $2.75 $25 Gerber’s (c.o.a.) $5.00 $100 Boarder Chuck E.
    [Show full text]
  • We Help Our Friends Grow We Want to Help You Make More Meaningful Connections Through: PRINT Online • Social Media Partnerships • Email Marketing
    2021 Media Kit Inspirational Art, Crafts & Lifestyle Magazines We Help Our Friends Grow We want to help you make more meaningful connections through: PRINT Online • Social Media Partnerships • Email Marketing A Somerset Holiday Art Journaling Art Quilting Studio Belle Armoire Jewelry GreenCraft In Her Studio Mingle Somerset Studio Willow and Sage & Special Editions 2 About the Publisher When it comes to the art of crafting, no one does it better than Stampington & Company. — Mr. Magazine™ Samir Husni Since 1994, Stampington & Company has been a Leading Source of Information and Inspiration for Artists and Crafts Lovers, Storytellers, and Photographers Around the World Known for its stunning full-color photography and step-by-step instructions, the company’s magazines provide a forum for both professional artists and hobbyists looking to share their beautiful handmade creations, tips, and techniques with one another. Our community loves to immerse themselves in our magazines. These magazines are meant to be curled up with, kept in libraries as a resource to reference, and to share years later with friends and family. The enthusiasm of our readers doesn’t end here. Our community loves to blog and post pictures across social media from a wide range of channels, showing off our exclusive stories and soul-stirring photography. Our Social Profile 100K+ Facebook fans 94K+ Instagram followers 2.7m Pinterest monthly viewers 25K+ Twitter followers Media Kit 3 What’s Inside This media kit contains a wealth of information. Take a moment to read each of our publication descriptions and audience information to find the perfect advertising venue for your products.
    [Show full text]
  • The New Borders and Waldenbooks Visa Card
    Double Rewards, One Card - The New Borders And Waldenbooks Visa Card Borders Group Inc., Bank One Combine Borders, Waldenbooks Rewards Programs WILMINGTON, Del. - July 31, 2003 - Earning rewards just became twice as nice for cardmembers of Borders* Platinum Visa* Card and Waldenbooks* Preferred Reader* Platinum Visa Card. Borders Group, Inc. [NYSE: BGP] and Bank One [NYSE: ONE] today announced that they've enhanced the Borders Platinum Visa Card to include Waldenbooks rewards. The new card is appropriately named the Borders and Waldenbooks Visa Card. The new card enables cardmembers to earn two points for every dollar in purchases at Borders and Waldenbooks stores, as well as their Web sites, and one point for every dollar in all other purchases. Every time cardmembers accumulate just 500 points, they will automatically receive a $5 Store Reward Certificate valid at any Borders or Waldenbooks store. Previously, cardmembers of Borders Platinum Visa Card could only earn double points for their purchases at Borders, and Waldenbooks Preferred Reader Platinum Visa cardmembers could only earn one point for every $5 in card purchases. In addition, consumers had to be enrolled in the Waldenbooks Preferred Reader Program to be eligible for the Waldenbooks credit card product. "We listened to our customers, which is why we worked with Bank One to combine both brands into one product offering that cardmembers can use at our more than 1,100 stores across the country," said Mike Spinozzi, executive vice president and chief marketing officer of Borders Group. "This is a great way for us to thank our customers for their loyalty and help them reap additional benefits from their everyday purchases." New cardmembers who apply for the card online or via an application available at any Borders or Waldenbooks store will receive a $20 gift card after their first purchase, which can be redeemed at any Borders or Waldenbooks store.
    [Show full text]
  • Barnes and Noble History
    Wingler 1 Brandon Wingler April 15th, 2015 Barnes & Noble: A Brief History from Reconstruction to the 21st Century Part I: The Origins of Barnes & Noble The story of Barnes & Noble starts as far back as 1873 in the modest town of Wheaton, Illinois, located about twenty-five miles west of Chicago. The area had first been settled in 1831 by Erastus Gary and, starting in 1839, his former neighbors Jesse and Warren Wheaton laid claim to about a thousand acres in what is now the town of Wheaton, Illinois. The Galena & Chicago Union Railroad first appeared in the town in 1849 and contributed to a small but noticeable rise in traffic and trade. In the first few years of the 1870s, Wheaton eclipsed the one- thousand mark for total population.1 In 1873, Charles Montgomery Barnes decided to open up a small bookstore in Wheaton. With the nearby Wheaton College and a new public school that had opened in 1874, Barnes’s business had a steady rate of demand for school books. It was only a short three years before Barnes elected to move his business eastward to Chicago and set up shop as C.M. Barnes & Company. After a couple of decades, Barnes decided to focus exclusively on school textbooks and reorganized the business in 1894. His son, William Barnes, and William’s father-in-law, John Wilcox, joined the company in the mid-1880s. Charles retired from the business in 1902 1 “Wheaton, IL.,” Encyclopedia of Chicago, accessed February 6th, 2015, http://www.encyclopedia.chicagohistory.org/pages/1350.html.
    [Show full text]
  • The Future of the Book. Part III. New Technologies in Book Distribution: the United States Experience
    DOCUMENT RESUME ED 262 767 IR 011 845 AUTHOR Paul, Sandra K.; Kranberg, Susan TITLE The Future of the Book. Part III. New Technologies in Book Distribution: The United States Experience. Studies on Books and Reading No. 18. INSTITUTION Library of Congress, Washington, DC. Center for the Book.; SKP Associates, Washington, DC.; United Nations Educational, Scientific, and Cultural Organization, Paris (France). PUB DATE 84 NOTE 37p.; For a related document, see ED 234 348. PUB TYPE Information Analyses (070) EDRS PRICE MF01/PCO2 Plus Postage. DESCRIPTORS Automation; *Books; Computers; Data Processing; *Futures (of Society); Information Systems; Man Machine Systems; *Marketing; Online Systems; Organizational Change; *Publishing Industry; *Technological Advancement; *Technological Literacy ABSTRACT The third report from a comprehensive Unesco study, this document traces the history of the application of computer-based technology to the book distribution process in the United States and indicates functional areas currently showing the effects of using this technology. Ways in which computer use is altering book distribution management activities are examined, including ordering, order processing, delivery, payment processing, and warehouse functions. Following a brief introduction, the first section discusses the general use of computer technology, changes in book distribution procedures, and the context and methodology of the report. Section II describes the activities of individuals, companies, and organizations whose efforts have brought about technological change in book distribution in the United States. Section III analyzes the various component steps in the distribution chain and the organizations involved in them; areas are highlighted which have already experienced change due to technological advances and areas where such changes can confidently be predicted to occur in the near future.
    [Show full text]
  • Tom Szkutak, CFO Goldman Sachs Internet Conference May 27, 2004
    Tom Szkutak, CFO Goldman Sachs Internet Conference May 27, 2004 Amazon.com This presentation may contain forward-looking statements, including statements regarding expectations of sales, gross margin, productivity, leverage, operating results, consolidated segment operating results, capital investment, return on capital, free cash flow and other financial statement or balance sheet items or ratios, all of which are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, among others, the potential changes in general economic conditions, Amazon.com’s risks related to potential future losses, significant amount of indebtedness, competition, commercial agreements and strategic alliances, foreign exchange rates, seasonality, potential fluctuations in operating results and rate of growth, management of potential growth, system interruption, international expansion, consumer trends, inventory, fulfillment center optimization, limited operating history, government regulation and taxation, fraud, and new business areas. More information about factors that potentially could affect Amazon.com’s financial results is included in Amazon.com’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2003, and all subsequent filings. Additional information relating to certain of our financial measures contained herein is available in our most recent press release and at our website at www.amazon.com/ir under ‘Financial Documents
    [Show full text]
  • 291550 Berlyfcneowtsyq9tmq
    SEARS Corporate Branding Guide, 2009 Executive Edition © Sears Holding Corp. Designed by EyeCon Graphics .......................................................................Our Mission .......................................................................................Our Story .........................................................................Current Brand .............................................................................Why Rebrand? ......................................................Mood and Inspiration ..............................................................................Color Choice The Guide .........................................................................................Type .........................................................................Imagery ................................................................................Logo Design .....................................................................Internal Launch ...........................................................................Employee Gifts ...........................................................................Stationery ..............................................................................The Campaign ....................................................................The New Look Mission To grow our business by providing quality products and services at great value when and where our customers want them, and by building positive, lasting relationships with our customers. Sears’ Vision To be the preferred
    [Show full text]
  • Barnes & Noble Case Study April 2012
    Barnes & Noble Case Study April 2012 From www.valueinvestorsclub.com LONG Barnes & Noble (BKS) April 22, 2012 Price: $11 Market Cap (fd): $800 mm Enterprise Value: $1.3 b Average Daily Volume: $17 mm Thesis BKS is a long because it has an under-appreciated asset in the Nook eReader platform, whose value will be illuminated through a partial sale of that business segment in 2012. We believe a conservative sum of the parts valuation for BKS is $11/share for the existing Retail and College bookstores and $26/share for the Nook resulting in a $37 sum of the parts valuation or 230% upside. Business Description BKS is 3 distinct businesses: 1) the 700 Retail bookstores that carry the Barnes & Noble brand name 2) the college bookstore business which operates campus bookstores at 640 different colleges and 3) the Nook eReader platform which sells the devices and digital content and will generate $1.5 b in platform sales in FY12 (FY ending in April). www.csinvesting.wordpress.com teaching/studying/investing Page 1 Barnes & Noble Case Study April 2012 The Retail bookstore is a dying business as we shift from physical to digital online purchasing of physical. We estimate underlying SSS are declining ~7% annually. However, due to the liquidation of Borders and downsizing of selling square feet for physical books at Wal-Mart and Target, actual SSS will be positive 1$ in FY12 and flat in FY13. EBITDA in FY12 will be $325 mm (or ~$294 mm excluding the Nook EBITDA that is accounted for in the Retail segment) and flat in FY13.
    [Show full text]
  • THE NEXT CHAPTER BOOK RETAILERS SAY THEY AREN’T SHRINKING from the E-BOOK CHALLENGE by Steve Mclinden
    AUGUST 2010 www.icsc.org THE NEXT CHAPTER BOOK RETAILERS SAY THEY AREN’T SHRINKING FROM THE E-BOOK CHALLENGE By Steve McLinden O, BOOKSTORES ARE hardly doomed to extinction. And no, the writing is decidedly not on the wall for the likes of Barnes & Noble, Books-A-Million or Borders, though the writing may have gotten downloaded onto an e-book reader. Counterintuitive or doubtful as this view of book superstore continuity might seem to some, it does, in fact, have its true believers. Indeed, say these, bookstores are far from writing their final chapter; instead, they will be penning a new series of dynamic sequels, if they can manage to meet an array of operational and real estate challenges. N “We see a lot of similarities in what’s Target Corp. announced in June that it will Barnes & Noble slashed the price on the Nook happening to big-box bookstores with the e- carry Kindles in all its U.S. stores, becoming to $199 from about $260; Amazon parried reader and what happened to the video-store the first brick-and-mortar store to do so, after and counter-slashed—taking the Kindle down industry with Netflix and on-demand,” said a 100-store test proved overwhelmingly to $189 from roughly the same base price. Joe Brady, a former Hollywood Video execu- positive. Target’s Kindle price is roughly the This e-reader dynamism combined with tive and now managing director of corporate same as that of the Barnes & Noble e-reader, relentless pressure from online sales means retail solutions at Jones Lang LaSalle.
    [Show full text]
  • Perpetual Turmoil Book Retailing in the Twenty-First Century United States
    ■ This article originally appeared in Logos 22/3, 2011, 16–25. PERPETUAL TURMOIL Book retailing in the twenty-first century United States Laura J. Miller The filing for bankruptcy by the bookstore chain Borders in February 2011 marked the end of an era. For close to 50 years, bookselling in the United States had been increasingly dominated by giant chains; com- panies amassing hundreds of outlets and honing a formula for making their brand names synonymous with the very idea of the bookstore in the minds of many consumers—and publishers. Starting in 1962, with the establishment of the first Walden Book Store in a Pennsylvania shop- ping mall, chains such as Waldenbooks (and its eventual parent, Borders), B. Dalton (and its eventual parent, Barnes & Noble), and Books-a-Million captured an ever-increasing share of the bookselling market, primarily at the expense of independent bookstores. But by the time that Borders declared bankruptcy, no careful observer of the book trade was very surprised at the company’s turn of fortune; it had been visibly ailing for several years. And while some explained the retailer’s troubles as result- ing from a string of poor management decisions, a look at Borders’ main rival, Barnes & Noble, showed that even a book retailer that had made better strategic choices was experiencing considerable instability. Some- thing had definitely shifted in the bookselling environment, leaving chain bookstores struggling almost as much as independents. In part, the chains themselves had sown the seeds of this shift years earlier by over-saturating the retail landscape and by normalizing vari- ous competitive practices, such as discounting, that then came back to haunt them.
    [Show full text]