Barnes & Noble is overrun with problems

It's hard to overcome a sexual harassment scandal when your business is in serious trouble.

Barnes & Noble, already shaken by the disorganized departure of its general manager, said Thursday that same-store sales fell 6.1% in the last quarter compared to last year.

The company attributed this drop to a drop in store traffic. Online sales also fell 14.3% due to fewer promotions, including Barnes & Noble's Nook tablet Business.

The overall losses of Barnes & Noble reached 17 million dollars. The combination resulted in a liquidation of Barnes & Noble (BKS) Stock.

The weak quarter came as other retailers benefited from a healthy consumption economy and this was another sign of a struggling business.

Barnes & Noble is at the heart of a leadership saga. He is looking to replace his fifth executive director in as many years.

The chain of bookstores fired its latest CEO, Demos Parneros, in early July, citing unspecified violations of company policy. In August, Parneros sued his former employer in federal court for defamation and fired him without cause.

Parneros alleged that Barnes & Noble was a "financially troubled company" and let it go a month after the sale of a contract to sell the company to an anonymous "book retailer". In response, Barnes & Noble said the allegations of sexual harassment and intimidation led to the termination of employment of Parneros.

"Parneros has not violated company policies and has always behaved in a professional manner," said the trial of the former CEO.

Barnes & Noble (BKS)which has more than 600 stores in the United States and 23,000 employees, has tried to reduce its expenses and increase its turnover. But he may not be able to reverse the situation.

"We are fully aware that reducing spending alone does not make the long-term viability of any retail business viable," said Len Riggio, president of Barnes & Noble. He highlighted the improvement in sales from one month to the next as a sign of the company's progress.

At a call to analysts, Mr Riggio said that the Parneros trial was "nothing but a smoke screen to try to extort money". Money to the company ". Parneros' lawyers did not immediately respond to a request for comment.

Riggio, Barnes & Noble's largest shareholder, built the company into a power plant in the 1980s, 1990s and 2000s. It attracted the best publishers, writers and book lovers and opened thousands of stores across the country. .

But Barnes & Noble has been steadily declining for years, largely because of Amazon's boom. Sales have fallen in the last five years as stores closed.

Barnes & Noble 's attempts to transform itself into the digital age by selling Nook tablets fell flat, and his course suffered.

At the same time, small bookstores are gaining strength. The American Booksellers Association, a trade group, reported that the number of independent sites rose 6% last year to 2,470.

"Small local bookstores compete by offering local and local expertise, social interaction with experts and book lovers," said Barbara Kahn, professor of marketing at Wharton.

She called Barnes & Noble "sterile" and said that retailers that offer only a wide assortment and low prices, with no other distinguishing features, are bait for Amazon.

In June, an investment fund took a stake in Barnes & Noble to push Riggio to make fundamental changes.

Riggio said the company was "healing" and would begin a search for a new CEO after its annual shareholders meeting in October.

But there is no quick fix to Barnes & Noble's problems. A new CEO will need to create ways to get more customers to buy books on the company's website.

"For many years, the company has struggled to integrate retail stores and online businesses," said Riggio.

Still, he promised analysts that Barnes & Noble would strengthen its online business: "We think some of the customers who have lost their heads over the past 15 years will start coming back."

The next CEO will also have to create in-store experiences that will make Barnes & Noble's visit more attractive than independent booksellers, and more convenient than acquiring Amazon (AMZN).

Timothy Mantel, a senior executive sharing the duties of CEO, said the best way to attract customers to the stores was to go through the local events of the Barnes & Noble Book Club.

He argued that a strong list of upcoming books, including "Fear", Bob Woodward's book on the White House Trump, and Michelle Obama's memoirs, "Becoming," will carry the company in the autumn and in the holidays.

CNNMoney (New York) First published September 6, 2018: 9:30 ET