Barnes & Noble Inc. (NYSE: BKS) had bad news for some of its workers, good news for investors and uncertain news for customers. They dying book retailer will cut its in-store staff, but customer service will remain the same. Shoppers will not notice the changes, at all, according to a Securities and Exchange Commission (SEC) filing by the company:
On February 13, 2018, Barnes & Noble, Inc. (the “Company”) today announced that it has implemented a new labor model for its stores that has resulted in the elimination of certain store positions. The new model will allow stores to adjust staff up or down based on the needs of the business, increase store productivity and streamline store operations. The Company wants to assure its customers that this will not affect its commitment to customer service.
The number of people who will be fired was not given. However, the action will save the company money and result in a short-term effect on its financials:
The Company estimates that it will incur a charge of approximately $11 million in its fiscal 2018 third quarter for aggregate employee-related severance costs in connection with these actions. The majority of these costs will result in cash payments during the Company’s fiscal 2018 fourth quarter, with the balance paid in fiscal 2019. The Company estimates that these actions will result in annual cost savings of approximately $40 million. The Company anticipates completing these actions by February 16, 2018.
The $40 million is relatively small compared to Barnes & Noble’s revenue, which was $779 million. The company posted a net loss of $30 million for the same period. Its holiday performance was poor. For the nine weeks that ended December 30:
Total sales for the holiday period were $953 million, declining 6.4% as compared to the prior year. Comparable store sales also declined 6.4% for the holiday period, while online sales declined 4.5%.
Perhaps Barnes & Noble can cut even more staff and keep its dwindling customer base happy.