B&N COO promoted to CEO

NEW YORK: Eight months after the bookstore chain Barnes & Noble Inc ousted its chief executive, Ronald Boire, ending a brief, tumultuous tenure, it has hired a successor from its own ranks.

Demos Parneros, 55, who has acted as chief operating officer for the past five months, will take the top post, according Barnes & Noble.

Boire was abruptly ousted in August, after less than a year on the job, when board members decided he was “not a good fit for the company.” Since then, the executive chairman, Leonard Riggio, who bought the company in 1971 and built it into a national chain, has acted as CEO, delaying his retirement.

Parneros, who joined Barnes & Noble from a top executive position at Staples, is taking over at a challenging time.

The company is still scrambling to compete with Amazon.com Inc and recover from steep losses from its digital Nook business. And despite some encouraging signs that the physical bookstore market has stabilised, Barnes & Noble has struggled to reverse sales and revenue declines.

In an earnings report in March for its third quarter, the company reported an 8% decline in sales, to $1.3 billion, compared with the previous year. Sales of digital content and devices fell nearly 26%, to $38.4 million.

The company closed seven stores, shrinking to 634 stores, down from 720 in 2010.

“The biggest challenge is the sales performance; that’s no secret,” Parneros said, adding, “We’ve got to figure out ways to change things up a little bit and increase traffic.”

He was optimistic about other aspects of the business, including the loyalty of its customer base and the possibility of increasing sales and traffic by expanding further into educational games, toys and gifts.

Parneros was also enthusiastic about the company’s new concept stores.

In an attempt to update the look and feel of its stores and experiment with new ways of attracting customers, Barnes & Noble has opened three concept stores — in Minnesota, California and New York — that are sleeker and brighter and have full-service restaurants that serve wine and beer. Two more such stores are in development, in Virginia and Texas.

At the same time, the company is facing competition in the physical store market. After decades of decline, independent bookstores have rebounded.

The American Booksellers Association counted 1,775 member stores in 2016, up from 1,410 in 2010. And Amazon has made an ambitious push into physical retail, with six new stores around the country and six more scheduled to open this year.

James McQuivey, an analyst at Forrester, said Barnes & Noble needed to innovate to survive, and quickly. “You’re never going to be that mass brand in every mall anymore because malls are gone.”

Investors, analysts and publishing executives will be watching Parneros’ performance closely.

He is the chain’s fourth chief executive since 2013, after Boire, who received $4.8 million in a separation agreement; Michael Huseby, who resigned in July 2015, became executive chairman of Barnes & Noble Education and left with a $10.5 million severance payment; and William Lynch, who stepped down in July 2013 after pioneering the company’s disastrous digital strategy, with a severance package of $3.65 million in cash and several million dollars in stock.

Parneros has virtually no experience in book sales, and he said he had undertaken a crash course in the business in the past few months.

Born in Cyprus, Parneros moved to New York City when he was in elementary school and spoke no English when he arrived. He attended New York University and joined Staples, the office supplies company, in 1987, when it had just four stores. He rose to president of Staples North American Stores and online, overseeing 1,800 stores and the web business.

Before he joined Barnes & Noble in November, he visited dozens of stores around the country to get a feel for the company. In his five months as chief operating officer, he spent a lot of time with Riggio.

Riggio, who has been heavily involved in designing the concept stores and reorienting the company since Boire’s departure, will stay on as chairman.