It’s hard to remember, but once upon a time Len Riggio, chairman of troubled Barnes & Noble (whose stock is at $16.20 this morning, down slightly for the day and down 66% from its 2006 high of $48.41), was an innovator. These days he seems an obstructionist, clinging to a fading business model and fighting all kinds of change that might help revive the troubled chain.
His latest blockade has been to thwart billionaire investor Ron Burkle, who has accumulated 19% of B&N’s shares and had hoped to get three new directors on the board. But this morning the existing board voted down the proposal, and so Riggio gets to keep on keeping on.
Riggio faces enormous challenges. Barnes & Noble has over 700 superstores, many of which have long-term leases. The market for physical books is declining steadily. The Nook is a cool device, but it’s not scaring Apple, with its iPad, or Amazon, with its Kindle. Like a fading music label, all Barnes & Noble’s efforts to keep up with the new world of digital books have fallen short.
Way back when, Riggio revolutionized the world of bookselling. The company’s superstores offered every book you could want, cheap, in a place that was as cool as Starbucks. The problem for independent bookstores wasn’t that Barnes & Nobel existed—it was that Barnes & Noble was so good. Cheap prices and a great place to hang was something the indies couldn’t match. Riggio saw that, exploited his advantage, and grew the company.
But he doesn’t seem to see a way out of this mess. In March, he made William Lynch, who ran the company’s Website, CEO. But aside from that move, and the introduction of the competitively challenged Nook last year, Riggio’s most notable move of the year has been to thwart Burkle.
It’s not easy for a CEO to reinvent something twice, especially when his industry is in the midst of a fundamental technological shift. The ability to do that is part of what makes Steve Jobs so unique. But Riggio is proving on a steady basis that he is no Steve Jobs. Burkle’s incursion presented him with a chance to reinvent the company, or at least rethink his superstore and digital strategy in a pared-down way that could benefit shareholders. But that would mean abandoning what he invented in the first place. And that is something that he’s clearly unwilling to do. Unfortunately for shareholders, that makes the future bleaker than ever at Barnes & Noble.