With print book sales in decline, the effect on chain bookstores like Borders (BGP) and Barnes and Noble (BKS) has been obvious. All one has to do is walk into a store of either chain and see how little relative space is devoted to books as compared to e-readers, gifts, toys, and games. Now B&N is testing out a new model for selling toys in its stores that essentially creates a "store-within-a-store" -- and if the tests prove successful, look for this model to be replicated all across the country.

According to Reuters, five B&N store locations in the tri-state area now contain 3,000-square-foot play areas with educational toys and games. This significantly expands the offerings already available in the retailer's 720 stores nationwide, and includes separate signs and five specific sections organized according to the goal of the toys, such as building, learning or playing.

Already on offer are a number of Lego products (B&N may stock some exclusive products from the toy company down the line),
trailer sets by Automoblox, the British "Me to You" line of plush dolls, and other toys with an educational element to them. What won't be sold, however, are action figures and other standard toy fare, since, as CEO William Lynch told Reuters, "We're not trying to create Toys R Us."

Investors will probably be happy with that declaration, but it remains to be seen whether they will think expanding toys to take up significant floor space in B&N stores is good from a Wall Street standpoint. Of course, investors were generally skeptical about B&N's Nook e-reader, and while sales of the device and its e-books aren't at the level of Amazon's (AMZN) Kindle, B&N is very solidly in second place. The upcoming Nook Color -- comfortably in between black and white e-readers and full-color tablets -- should also provide a healthy sales boost for B&N during the holidays.

But as long as Barnes & Noble is beholden to shareholders, larger problems, such as the long-running proxy fight with Ron Burkle, solicitation of potential sales bids and the complex relationship between the company and its founder and chairman, Leonard Riggio, overshadow practical changes made to the stores at ground level. If those larger problems are taken care of, B&N will have more breathing room to transform at a rate it dictates, rather than one dictated by others with an interest in whether the stock price goes up and down.

Increase your money and finance knowledge from home

Investment Strategies

What's your investing game plan?

View Course »

Introduction to Value Investing

Are you the next Warren Buffett?

View Course »

Add a Comment

*0 / 3000 Character Maximum

1 Comment

Filter by:

Nook Color is better for reading than iPad and better for everything else than Kindle. Nook Color is better for $249. Nook Color screen is supposed to be better (less reflective) for reading than iPad thanks to new LG screen with anti-reflection coating. It allows to watch videos, listen to the music, view Office documents and PDF's. Barnes & Noble special Nook SDK runs on top of the standard Android one and gives developers access to exclusive extensions and APIs for the Nook and its interface. So porting Android apps is not difficult. Nook Color specs: - $249 with free shipping - 7 inch Color LG Touchscreen 16 million colors with anti-glare coating 1024 x 600 delivering 169 pixels per inch. - 8GB built in memory expandable to 32 GB with microSD card. - Formats supported: EPUB, PDF, XLS, DOC, PPT, PPS, TXT, DOCM, XLSM, PPTM, PPSX, PPSM, DOCX, XLX, PPTX, JPG, GIF, PNG, BMP, MP3, AAC, MP4. - Wi-Fi (802.11 b/g/n), USB port - OS: Android 2.1 - Processor: TI 800 Mhz ARM Cortex A8-based, 45nm OMAP3621

November 15 2010 at 3:07 PM Report abuse rate up rate down Reply

This is an act of desperation. When you start seeing cheap plastic dollar store type promo product in the B&N stores the end will be near.

November 14 2010 at 10:28 AM Report abuse rate up rate down Reply

Sounds like a great idea! Upper income parents often shop that type store, so upper class type toys with upper class mark up should do well there. I hope so, because we need quality stores now more then ever. Only ones I feel sorry for are the few indepent book & toy stores left. Lets not forget them. Lets spend some money for books & toys with them.

November 11 2010 at 6:21 PM Report abuse rate up rate down Reply