It looks like the Barnes and Noble business model has caught a break. We suggested that B&N could profit significantly by simply buying the faltering Borders in our column
Is Barnes & Noble’s Business Model in Trouble. Evidently, good things come to those who wait because Borders has decided to liquidate all holdings and close their remaining stores. There is no need for B&N to fork over the paltry $900 million market capitalization for Borders now. Vulture capitalists rejoice!
Our calculations show that Barnes & Noble’s business model will add over $150 million dollars in margin simply from the Border’s spillover. Congratulations B&N, you are winning the war of attrition. All that is needed to completely evitalize the business model is for Wal-Mart and Amazon to fold up shop too.
Typically, when an industry is losing competitors to bankruptcy, forced merger, or underperforming division shedding, it is the final sign of a dying industry. Barnes and Noble may be the only big player left, but their business model may still be in trouble. Borders exit may give B&N a couple years of good profitability but general industry erosion will rear its ugly head in no time.
What should Barnes & Noble do to improve its business model?