How Greed Led To The Downfall Of Barnes & Noble

But it's struggling. Stores are closing all over the country and the bookseller's holiday sales numbers were disastrous.

Dennis Johnson, founder of MobyLives and co-founder of Melville House, has written up an interesting perspective on the fall of Barnes & Noble.

And the saddest part is that it didn't begin with consumers going online for e-books.

It all began with greed.

"The demise of B&N has nothing to do with what its customers actually wanted, what’s best for mother literature or free speech, or anything other than made-up trends covering for killer capitalism," he wrote.

"In short, B&N’s scorched earth policy of the 1990s has ultimately left us with, well, scorched earth," wrote Johnson. "If the book is going to survive it, it’s going to take some real revolutionary activity, indeed."

Go back to that decade. Barnes & Noble used brutal tactics to kill the country's independent booksellers, undercutting prices and opening stores everywhere to the point that it "poisoned the well," and the Barnes & Noble stores themselves died, explained Johnson. Borders had done the same, and now, it's gone forever.

They had fallen in too deep. Then, later, instead of focusing all its energy on the health of its bookselling business, Barnes & Noble worried about higher-margin offerings.

Johnson elaborated:

"There’s still plenty of evidence that people like bookstores, for example, and even sales of hardcovers — let alone print books — are holding on. And so the lust for higher margins — whether from Godiva chocolates or ebooks — turned into fool’s gold for B&N.

It’s perhaps a typical death in the Free Trade era, when companies lose all sight of their identity in the blinding light of the bottom line … but it’s the wrong death for a bookseller."

If Barnes & Noble can't fix its strategy — after all, its e-book business has also taken a hit, as Nook e-reader sales dropped a surprising 12.6 percent — while continuing to sell physical books, its fall could take a serious toll on the industry.

"The closing of bookstores selling print books may also be hurting the sale of ebooks," explained Johnson, citing evidence from a recent New York Times article on the topic. "The only logical conclusion one can draw from all this, of course, is that if B&N goes down the entire industry is [expletive]. Booksellers, publishers, authors, agents, librarians, and oh yeah, readers."

Read Johnson's entire column at Melville House >