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Why Barnes & Noble's Nook Subscription Sales May Spell the End of Its Stores

Barnes & Noble's (BKS) latest sales milestone may have execs at world's largest bookseller doing a victory lap. Just don't look for them at any of the chain's 700+ stores. NOOKnewsstand is responsible for the stellar sales with a mix of subscriptions and single copy digital periodical downloads amounting to 650,000. Results like this continue to prove B&N's investment in its digital strategy is continuing to pay off handsomely.

It's certainly very encouraging when you consider that magazine sales on Apple's (APPL) iPad have taken a nosedive since their debut, according to data from the Audit Bureau of Circulations. For example, WWD's Memo Pad reported Wired's first digital edition sold 100,000 copies and was down to just 23,000 five months later. But now that Nooknewsstand is outstripping sales on the top-selling tablet, will B&N's confidence spell the end of brick-and-mortar bookstores as we know them?

Barnes & Noble's stores are becoming more and more like placeholders for digital gadgets and non-book items. Indeed, walk into any B&N store and it's hard to miss the bright, white shrine to Nook visible immediately after crossing the threshold. And real estate for paper books in B&N's stores continues to shrink in other ways as tables formerly laden with the latest good reads have been supplanted by toys, games, greeting cards, desk accessories, and the like.

Laments from more Luddite bookworms notwithstanding, e-readers are selling like hotcakes. B&N's comparable-store sales might have posted an impressive 9.7 percent increase -- the first holiday gains in five years -- but the charge was largely led by Nook. On the e-commerce side, Barnes & Noble.com's comps increased a whopping 78 percent compared to last year's holiday selling season. All the more reason the C-suite may be considering a more a seismic shift.

In fact, it's already in progress. B&N may be blowing smoke around what it calls "small organizational changes," but prominent heads have rolled this week. PW reported that veteran VP of merchandising Bob Wietrak and Marcella Smith, director of small press and vendor relations, left the company along with a number of buyers including Lee Stern who was responsible for cookbooks (not many of which are available as e-books yet). Reports say up to 50 positions in the buying group were eliminated.

PW's report says one publisher noted, "Someone has to be in charge of getting books into the stores." Maybe not, if B&N's ultimate goal is to move the entire business into the ether.

Image via Telonu CC 2.0

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