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Are Barnes & Noble stores investments or sentiments?

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Leonard Riggio, chairman of Barnes & Noble (New York), has indicated recently that he might buy up all the retailer’s remaining stores (less than 700 now) and take them private as a way to preserve them.

Otherwise, it seems clear that the Barnes & Noble board is intent on separating its retail arm from its e-book arm, Nook Media, and shuttering all the stores. Both are struggling, and maybe the current management wants to dump the whole thing.

Riggio, whose first love is clearly those stores, now has to figure out what 689 pieces of real estate would be worth to him. Analysts value the stores at widely disparate figures, from as low as $484 million to as high as in excess of $1 billion.

Is the decision as daunting as the one Riggio faced 40 years ago? A student at New York University, he worked as a student clerk at the single campus bookstore on lower Fifth Avenue. 

Riggio bought the store in 1971 for $1.2 million. I’m sure it wasn’t pocket change to the 20-something from Brooklyn, but what a bargain it turned out to be. It was the dawning of the age of the category killer, and Barnes & Noble spread-eagled the book and stationery sector as Sports Authority did sporting goods, Circuit City did consumer electronics, Toys‘R’Us did toys, Linens ’n Things did linens and things.

Barnes & Noble stores achieved the ultimate level of consciousness: They were lifestyle places, destinations for people who wanted to browse the shelves, read a magazine, look at the newspaper. Third places in the social hierarchy of the early 21st Century. You didn’t necessarily go there to buy a book. But if you were looking to buy a book, that’s where you’d go.

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Then the third place shifted to become that digital land of Middle Earth. It’s where you went to interact with friends, tap into the world, order books and read the news.

So would Riggo’s purchase of the Barnes & Noble stores be a sentimental play, like setting your eldest child up in a business, even though you know he’ll destroy it?  Or a genuine investment with a real return, like that $1.2 million check he wrote 40 years ago?

That one worked. But it was a long time ago, in a galaxy far, far away.

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