Greetings and good afternoon from the ski slopes of Vermont! This week is probably the only one all year I get to say good afternoon - let’s face it, no one wants to be reading this during The Big Game. Let’s Go Pats!

Before we dive in this week, I got some great feedback from a reader requesting sharing cool events I see in the CPG / Retail space (mostly NYC-based). Going forward, this section will be at the end of the newsletter, after the news links section. If there is something you want to see in this newsletter, don’t hesitate to reach out!

Also, if you have any events you want to share, send them over. So, let’s dive into the next couple of weeks’ events!

In the mid-2010s in West Hartford, Connecticut, one of THE places to be was the Barnes & Noble in Blue Back Square. It had tables, games, a Starbucks Cafe, and, maybe, if you were feeling adventurous, you would pick up a book or two. From a financial perspective, that period is about the time when Barnes and Noble struggle really amped up. But, flash forward to 2026, Barnes & Noble is preparing for an IPO, and I named them one of my retailers to watch this year. What changed? Many things! As always, let's dive into the (long) history first:

1873 - Charles M. Barnes founded a book business in Wheaton, Illinois

1886 - Gilbert Clifford Noble, who had graduated from Harvard College earlier that year, was hired to work at Arthur Hinds & Company as a clerk in NYC

1917 - Barnes son, William, joined G. Clifford Noble in establishing Barnes & Noble by buying out Arthur Hinds, the store later moved to 18th Street and Fifth Avenue

1931 - Barnes & Noble opened a new publishing division

1940 - The Banres & Noble Store is one of the first to feature background music, Muzak

1966 - Amtel, a conglomerate I cannot find information on, purchases the company after John Barnes dies

1971 - Leonard Riggio purchases the company for $1.2 million from Amtel, which now consists of a significantly reduced wholesale operation and a single retail location (the flagship store at 105 Fifth Avenue)

1970s and 1980s - Barnes & Noble opened smaller discount stores, which were eventually phased out in favor of larger stores, as well as publishing their own books to be sold to mail-order customers.

1986 - Expansion, when B&N purchased the primarily shopping mall-based B. Dalton chain, with almost 800 locations, from Dayton Hudson for ~$275M

1989 - Barnes & Noble purchased the 22-store chain Bookstop

1993 - Barnes & Noble goes public, issuing $77M worth of stock on the NYSE

1997 - B&N launches a joint venture with Sears and IBM to sell books online, going public as a separate entity only two years later (man, the dot com era was a whirlwind)

1999 - B&N purchases GameStop, which it sells off five years later

2010 - A New CEO is appointed with a big focus on the Nook, their e-reader competitor to the Kindle, and also downsizing store footprint

2018 - Company closes 400 locations and lets go of many employees

2019 - Elliott Management acquires the company for almost $700M and installs James Daunt, CEO of London-based Waterstones Booksellers, as CEO of B&N - and the resurgence begins!

2023 - 30 new locations open, existing stores are doing better, due to Daunt’s merchandising and operations focus

What a fascinating history! Way more to unpack than I initially thought when I started this piece. Let’s start with what went wrong. For starters, a shift away from reading definitely hurt, but I think that only hurt so much because the foundation had eroded so much. The overexpansion of B&N was pretty significant. At its peak, there were 720 locations, most of which were very large format. Additionally, the store lacked a value prop. Sure, video gaming, CDs, DVDs, etc, were growing, but did they need to buy Gamestop or just merchandise some sections in the store. Even a small section needs to be scrutinized heavily. Retailers have finite space and anything that takes away from the core value prop (in this case, books) is a big risk. Finally, what I believe is the final nail in the coffin, the nook distraction. I get the Amazon competition, but why is a retailer building hardware pretty much alone. A partnership here could have gone a long way. At one point, B&N was spending $30M per quarter on Nook -- and this was after the initial startup costs! Focus is vital, eliminate distractions.

However, here we are, and Barnes & Noble is thriving. So, what went right? First, James Daunt is probably the top retail bookstore operator in the WORLD, having operated in the space since 1990, and in particular scaled Waterstones in the past ten years. He is super disciplined and focused, plus is making sure they focus on the books. One tactic that flies under the radar is the autonomy he gives each store to merchandise and layout the store, injecting a more local feel to each. Finally, on the social media front, B&N totally missed the first couple waves, but has been totally embracing TikTok. Social media allows companies to embrace the trends in a low-cost way, and B&N is totally exemplifying that.

Another week in NYC, another very eventful time in the pop culture world. With the rise in betting apps and the legalization of sports betting in a lot of states, many forms of betting have cropped up. One form is the prediction markets, like Kalshi and Polymarket, where you can bet on ANYTHING, sports, politics, pop culture, earnings calls, etc. I am not really a fan of the ease of this betting, and ultimately feel like we will reflect back on these services negatively. These companies, however, have identified retail, in particular grocery, as an opportunity most likely on the marketing side. In a span of days, both have launched marketing stunts involving retail. Here is a breakdown of what they did:

What a weird timeline we live in. Regardless, I think this validates the importance of marketing with pop-ups and retail.

BJ’s, which is known for its warehouse-style, membership clubs, where you can buy huge quantities and save, is shaking things up. It just announced the opening of its second BJ’s Market in Delray Beach, Florida. Located in between three other warehouse stores, the goal of the store is to help fill in the gaps and smaller shopping trips. The press release explicitly calls out “weeknight grocery run or a fast weekend trip between games and activities“ as the types of trips this store is looking to cater to. The store occupies 55,000 square feet, which is about half the size of a typical BJ’s store. The assortment focuses on fresh foods, produce, convenience, and drug store items. This is the second BJ’s Market, after the concept was first introduced in Warwick, Rhode Island, in 2022. Clearly, something is working if they decided to open a second spot! I think this makes a ton of sense and am excited to see where it rolls out next. Maybe even in big cities? Also, will Costco and Sam’s Club follow suit?

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