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Apple Considering Barnes & Noble Acquisition?

rdowns said:
Would you people please stop with the ridiculous notion that the "real estate" is valuable. They RENT the vast majority of their locations and are likely stuck in unfavorable long term leases. Furthermore, the national retail vacancy rate is near 10%.
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You're misinterpreting what I said entirely. I said IF they were even to consider it, it would be for the real estate. I went on to say that they're NOT doing it. Nowhere did I imply any actual value to the real estate.

Further, the shopping center owners in those locations would allow a renegotiation of the lease for a new tenant, which is standard ops in commercial real estate. If the bought 100% of the chain outright, it would be unlikely they'd get any break on the leases -- but even in those circumstances a buyer can put the deal contingent on better lease terms and work that out with the property owners before they even buy.
 
klrobinson999 said:
Apple is a hardware company, Their media initiatives exist to promote and sell hardware. Thus, zero chance they would be interested.

Not that BN is necessarily for sale anyway.
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Wow, stupid me. Here I was thinking they were a software company that assembles unique machines, generally using parts made from other companies, to create hardware on which to run the software on. :rolleyes:
 
rorschach said:
This is silly. What would Apple do with all the brick-and-mortar stores? This is another "Apple to buy Twitter" or "Apple to buy EA" rumor.

If the rumor was Apple looking to buy Amazon…that might be a different story (even if it's also unrealistic, it would still make more sense than this).
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While I agree that this rumor seems very unlikely, I do see a potential that you may be overlooking: By purchasing the last of the big-box book stores, Apple could develop a combination Apple/book store specializing in Apple products and advancing the whole-house computing paradigm utilizing all aspects of Apple's products in a person's everyday life. Again, this is only conjecture.

One argument against this is the fact that Apple could have purchased Borders for far less, I'm sure. Conversely, B&N has a greater reputation as a brainiac's bookstore rather than commodity.

So why? There could be a number of reasons. Is it true? It seems unlikely. I'll see it as a rumor until something more verifiable comes along.
 
klrobinson999 said:
Apple is a hardware company, Their media initiatives exist to promote and sell hardware. Thus, zero chance they would be interested.

Not that BN is necessarily for sale anyway.
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I agree with you. But they are getting really good at this Software distribution business. 30% on every sale! Wow. Although with their new data center, people would think they're getting into cloud services, but they're not charging a penny (except with that iTunes service). So yea, clearly a ploy to sell more hardware.
 
Kwill said:
Sounds rather unlikely for several reasons.
  1. Apple likes to cherry pick its locations to guarantee ROI. *
  2. Simultaneous renovation of hundreds of stores is major undertaking. (None have glass staircases or are in the shape of cubes.)*
  3. Apple has already stated how many stores it plans to open this year -- a significant number, though not in the hundreds. **
  4. If retail locations are not ideal and there are no tangible assets like a patent portfolio or coveted technology, there is no real value.
  5. For a smooth transition with minimal job loss, Apple would need to keep most of the stores open during makeover.
  6. Too fast too soon. Each location would need to have sufficient inventory and trained personnel unless the model changes where they are more like loss-leading hangouts to read with a Genius Bar rather than typical retail stores.
  7. As stated, the Borders acquisition of of 399 locations (or some part thereof) in July would have been a better bargain.
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I am just amazed at people doing this:
Read the rumor --> think it unlikely --> dream up unrealistic scenarios --> think they've confirmed that it's unlikely.

You seem to think Apple wants to build whole Apple Stores from the ground up to replace every B&N location. Why would they do that? Why would it then also have to be overnight? Simultaneous?

And really, everyone saying Borders was a better bargain doesn't get it. Borders wasn't a bargain, Borders was dying. Borders wasn't run well. Borders was cheap, yes, but when you buy something which doesn't help you, that's not called cheap. Cheap and bargain are totally different concepts. Unless, of course, you assume that Apple wanted just ANY bookstore. Again, a crazy assumption.

Let's look instead at just some factors that may be in play:
1. Apple knows what it's like to have to negotiate with content providers
2. Apple wants textbooks on iOS and Mac devices
3. Houghton Mifflin's $90 hardcover textbooks are made possible by college campus bookstores.
4. Buying B&N, immediately creating a modest iOS and lower-end Mac section with predictable inventory needs (think more like Best Buy), these would hardly make a dent in Apple's pocket.
5. Dealing with a bookstore business is new to Apple
6. Acquiring a business is typically a long term move
7. Do they have to go as far as acquisition to make big changes?
8. College students use Apple devices more than any other demographic.

Might Apple have a way of making it work?
 
BN Acquistion - just wait

If they wait a while, they'll be able to buy it cheaper "from the judge". It will probably go the way of Borders.
 
HelveticaNeue said:
I don't know if it makes sense for Apple to purchase B&N just for the ebook deals and store locations. Apple is very careful about where they open their stores. They couldn't possibly be interested in more than 10 of B&N's locations across the US. As for the ebook catalogue. Apple already has deals with many of these publishers, who will hopefully be looking to assist iBooks catalogue after the loss of Borders.

I don't really trust this source, but I do hope iBooks comes to Mac in September. I don't believe it will be a part of iTunes, though. Seems like it should be a independent app in the Mac App Store.
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I agree with your conclusion, but not with the argument leading up to it; quite honestly Barnes & Nobles has large stores in many cities where there is no Apple Store and using a B&N to introduce an Apple Store in those cities could serve as a foot in the door for some otherwise very limited markets. While I do agree that Apple wouldn't need every B&N location, cities like Chattanooga, in Tennessee, have almost no Apple presence outside of remote mom and pop-style shops that simply don't have the kind of exposure that an Apple Store itself receives.
 
This sounds like an analyst just trying to make some noise. The only thing of any value whatsoever that I can think of is B&N's presence on 600 campuses running their bookstores. It would be an opening for Apple to sell iPads, Macs, and iPhones directly on college campuses in college towns not big enough for an Apple Store. However, Apple seems to have no trouble selling things to anyone, much less college students.

Perhaps there was talk of Barnes and Noble partnering with Apple on eBooks so that it wouldn't have to develop a Nook tablet compete with the upcoming Android Kindle tablet, but even this doesn't make much sense to me. The beginning of the end of Borders was when they outsourced their online store to Amazon. B&N outsourcing their tablet/eReader strategy to Apple would be equally one-sided in Apple's advantage.
 
rorschach said:
This is silly. What would Apple do with all the brick-and-mortar stores? This is another "Apple to buy Twitter" or "Apple to buy EA" rumor.
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There's one of two possible reasons for this rumor:

1. Apple is spreading this rumor to sucker Microsoft into doing a quick grab for B & N in attempt to copy Apple before Apple completes the deal.

2. Apple is really, REALLY wanting those mother ships atop the stores. See photo.
 

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How it went down...?

Rumors like this start when Steve Jobs gets pissed off in talks with other parties. He was probably talking to B&N about some channel relationship and said, "fine, we'll buy your ass" when they seemed disinterested.
 
Apple buying and operating Barnes & Noble makes no sense at all, and Barnes & Noble's representatives said as much in response.

What does make sense, would be Apple run stores inside Barnes & Noble locations.

Apple knows that to increase market share they must have a strong retail presence. While their stores have been successful, they still don't have that much of a presence. The average consumer will not drive more than 20-30 minutes to go shopping, and most consumers are farther than that from an Apple store.

Apple also knows that their products do not traditionally sell well alongside other competitors in brick & mortar stores like Best Buy. They don't generate as much profit for the retailers, so retailers have an incentive to push something else.

Barnes & Noble created the Nook as a means to prevent going out of business, not because e-reading is a concept they embrace. It is highly unlikely that it is a particularly profitable product for them. They are a traditional retailer, and as such, they need one thing--traffic in their stores. Few consumer product companies attract as much traffic as Apple stores.

Physical media like CD's & DVD's are not selling. Most Barnes & Noble locations have quite large music and movie sections toward the back of their stores. They are most certainly exploring options to rid themselves of that part of their business. This would be an ideal location for a consumer attracting store-within-a-store.

Barnes & Noble stores are attractive, relaxing, loaded with non-competitive (to Apple) items to browse, and feature popular cafes. They appeal to Apple's target demographic as well.

If anything is going to happen between Apple and B&N, expect it to be something like this. A total purchase is unlikely, but a similar move (even if somewhere other than B&N) has to be on Apple's radar.
 
UltimaKilo said:
Wow, stupid me. Here I was thinking they were a software company that assembles unique machines, generally using parts made from other companies, to create hardware on which to run the software on. :rolleyes:
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You would be wrong. They are a hardware maufacturer that derives around 90 percent of it's profits from sales of physical devices.
 
It SEEMS very unlikely, and coming from an "unproven source" even less so.

But from a (purely hypothetical) standpoint, why might this make sense?

1) Conventional wisdom says bricks and mortar bookstores are dying. Of course, "conventional wisdom" said opening branded retail stores for Apple computers seemed like a pretty bad idea at one point too. Maybe Apple feels that its retail footprint could use some goosing. In other words, why let Target and Best Buy take the retail markup for all those iPhones and iPads they sell.

2) Apple is never going to sell a ~ $150 iPad. But a Nook, with an Apple logo, plus a little bit of Apple's design and software magic, might blow away the "near tablet" e-reader marketplace.

3) Barnes & Noble is still the king when it comes to dedicated bookstores. Owning B&N would give Apple unprecedented leverage when negotiating with book and magazine publishers.

4) There aren't many companies in the world that could afford to blow a couple of billion dollars on a "whim" - but Apple is the exception to that rule.

5) Apple's only real competitor in the online entertainment business is Amazon. Buying B&N would give them not only an e-reader to challenge the Kindle, but a physical and on-line physical bookstore too.

6) Textbooks are still where the big money is made in American publishing. (ie. 50 million students, each spending between $50 and $500 per year on schoolbooks.) Think big: Ten million iPads a year, plus an annual "schoolbook subscription" in the hundreds of dollars, all updated daily, weekly, hourly, thanks to Apple's iCloud for the rest. Apple could run the data part of that business at "break-even," save students and school-districts billions, and make themselves another fortune in steady, predictable hardware sales.

Overall I think the idea seems unlikely. But part of me says Apple's top management knows they've got to take a few chances if they want to stay ten steps ahead of their competition.
 
it would make sense for only one reason: to take everything nook over to ibooks. right now the ibooks inventory is slack. i think it would be a bold move and a loud message about apple's intentions about curating digital media.
 
wizard said:
I don't trust the source either but the point is there is sound reasoning to grab the land and buildings. Locally anyways B&N has some really nice properties where as Borders has run down pits not suitable for anything Apple.
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Depends on the location though. Center City Philly Borders was in a nice historic old building with a gorgeous top floor ceiling. Boylston Street in Boston, Michigan Avenue in Chicago and Park Avenue in NYC were far from dumps as well. A minority perhaps but still. I'd rate my closest Borders as slightly nicer than my closest B&N.

In any case, with Borders closing I'm crossing fingers the Nook keeps saving B&N. I'd be crushed if that went away too.
 
Nook

I was thinking about the Nook when I read this, and not just for the eBooks liberry, although that makes perfect sense (and is much more detail-oreinted than I'm capable). Great idea! Apple can also ramp up the Nook to dwindle the Kindle, too (sorry)--while using B&N's strong brand (which also lets them maintain the Apple brand, proper) to fake a competitor--and help shift folks to iPads. They make $ any way, but being the default reader helps them against other "tablet computers" of all sorts. They're working on all fronts, taking the Amazon approach, perhaps ironically. They're looking to corner all digital media (bow, Adobe, bow) on all device types. Well, iThink it's cool, anyway. Let's just hope they don't branch out into selling stuff like sneakers. Oh, wait...
 
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