Global business news twenty four hours a day at Bloomberg dot Com, the Radio plus Mobile Act and on your radio. This is a Bloomberg Business Flash from Bloomberg World Headquarters. I'm Charlie Pellett, fed Metted Wednesday. We've got stocks fluctuating now trading lower in this update brought to you by Instinct Equities from Bank of America Mary Lynch. Your access to informed insights, market color and unique liquidity Instinct Equities.
That's the power of global connections. Now let's head right over to the first Word Breaking news desk for today's afternoon call. Here he is one and only Bill Maloney. A good afternoon, Charlie Maybeways averages are quiet today, with
the down currently down four points. SUPs are a little change, the NAZAC falls nine and a half, the small cap six hundred is down three points, and the US tenn yield at one point five six out of tenness be sectors are higher, let by gains and utilities, Financials and consumers, Staples, consumer discretionary and telecom led to the downside down. Transports rise twelve points and as a by texts fall five. Utilities gained eight and the VIX is down by one
point four percent. Down leaders included three M, DuPont and Fiser, while Cisco, McDonald's and Intel led to the downside. In the retail space, Staples, Target, and Low's all fell after their results, while Urban Outfitters stored as much as nineteen percent after its earnings after the belt Tonight look for earnings from Cisco. Estimates are for sixty cents on revenues
of twelve point five seven billion. Live from the First Breaking News desk on Bill Maloney, Charlotte, all right, thank you very much, Bill Maloney, and to hear live breaking news over your bloombread tip squawk squ a w K on your terminal. I'm Charlie Pellett. That's a bloom Bread business flash. You're listening to Taking stock with Kathleen Hayes and Pim Fox on Bloomberg Radio. Another chapter for Barnes
and Noble. Well, it's beginning with a stock decline of nearly twelve percent to day after its CEO, Ron War was ousted. Apparently he's not the right person to revample bookstore chain obviously struggling to compete with Amazon and other online sellers. For anybody, though, who likes going into those big Barnes and Nobles and then in a cup of coffee looking at books. This is kind of a dark cloud. Matt Townsend is here retail reporter for Bloomberg News, and
he's been taking a look at this today. So you know, the CEO Austre is one thing, and then these there's these big forces that are pushing against Barnes and Noble. But let's start with the CEO. What happened, Well, he was there barely over a year, and you know, when he was hired, he was seen as a guy who had a ton of experienced retail He worked for Toys r US, Best Buy, UM, and his big idea was,
you know, books much very competitive market. So we're gonna put more non book things in Barnes and Noble, more toys, more accessories, gifts. UM. They recently announced that they were gonna start testing putting beer and wine in their store, which for a lot of people made a lot of sense because that goes well with reading books and their cafes and things like that. UM. So we don't really know behind the scenes why he was actually asked to. The results have been mixed. UM. You know, it's not
drastic declines right now in the business, they've kind of stabilized. Um. But at the end of the day, this is still Len Riggio's company. He founded it over fifty years ago. He's still the chairman. He was set to retire in September, kind of walk away and just be a board member. No longer chairman. He is now staying, going to find a new CEO and run the company while they look
for the next CEO. Is this really a bookstore company or is this a real estate business that happens to sell books and whatever else they can sell in those large square foot print you know, I mean it's it's it's definitely shifting away from a bookstore that they have to and that's they're deversifying. As far as the real estate of me, I believe most of their stores are just leased. UM. So it's not that they own a bunch of real estate that's worth a lot of money.
They gonna let the releases roll off. That's what they've into doing. That's what they've been doing. They've been UM. When at least comes up, they either get out of it or they renegotiate it. UM. But I will say, you know one thing, going for Barnes and Noble is that the publishing industry does not want to see Barnes and Noble go away because then they'd be left with dling with just Amazon, which is not a good thing
for them having the publishers. So the publishers will probably and then mall owners like Barnes and Noble too, because it draws a lot of foot traffic, even if no people aren't always buying books when they go in the stores. So are reasons why Barnes and Noble probably has a much longer life than maybe some other retailers because publishers, publishers want to keep them in business, and the malls
way I like them. Okay, Bloomberg News, your team reporting that you're you're reminding us that Amazon's testing physical bookstores could ultimately open hundreds of them. So obviously, if Amazon is thinking of doing this, it's not like there's something just totally oh you're there's there's no reason to be a brick and mortar bookstore, and Barnes and Noble has
the brand Barnes and Noble's. Um. What Amazon does with a physical location would probably incorporate, you know, places to a place to pick up your packages and stuff like that, so it would be, you know, it's branding, it's they could sell all their you know, their their their tablets and things like that. But that's true. I mean, you know, the books have taken away some of the market share for physical books, but the books have kind of plateau there.
They're the market roughly, so people are still reading a lot of physical books. Um. I mean, one really strong part of the book market that hasn't been taken over at all by the books is children's books, for example, and Barnes and Noble even before Ron Barr got there, I had made a push to put more children's books in their stores, may put more places for kids to read,
kind of like a sort of pseudo library. The stock is down more than right right when I took a look at the the release the earnings released, you're talking about a retail sales decline of more than two percent. You look at the nook sales division that's down. At what point does this become a business that is just about saving the jobs of the twenty eight thousand people that work there rather than about growing the business. Can
this go on? And definitely, I mean that that's basically the conundrum with every brick and water sort of traditional retailer out there, it's how do you manage a slow decline. There's a lot of growth out there for any retailer that has fiscal stores nationwide. So with Barnes and Noble, yeah,
that is you're managing to decline. Um. You know, they made this big push into digital books with the Nook and had these Nook tablets and for a while they were okay and did pretty well, but eventually they got crushed by Amazon and iPads and everything else. So it's much diminished business as far as that. But yes, no, I think a big part of this is how do you manage a declining business and how do you sort of stabilize it getting back to a growth business. I
mean that seems out of the question. Of course, part of the backdrop has been in some weak retail segments. It's not just Barnes and Noble when you look at the consumer but quickly, uh analysts of what are they saying about barn Is there anybody out there saying, oh, it's beaten up by it? Um? I haven't seen that, but you know, if the stock is every and when the soccer is selling them when someone's buying it obviously. So UM, you know it's it's still has positive cash flow,
it's still is profitable. Um, it doesn't have a lot of debt to deal with. Its pretty good shape, all right, Matt Townsend, thank you very much for joining us. He's a retail reporter for a Bloomberg giving us the lowdown on Barnes and Noble and the shares down more than eleven percent. This is Bloomberg. Yeah. Miss. Olympic up Day is brought to you by your tri State BMW centers. Visit them online at tri State BMW dot com. At BMW they only make one thing, the ultimate driving machine.