Barnes & Noble, Inc. (BKS)’s Secret Weapon To Counter Slide: Laurie Schacht

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Barnes & Noble, Inc. (NYSE:BKS) has a secret weapon up its sleeves to counter the company’s decline: toys. Laurie Schacht told Betty Liu in a discussion on Bloomberg’s “In The Loop” that the bookseller’s latest bid to try and sell more toys is a “smart” move.

According to the Adventure Publishing chief executive officer, Barnes & Noble, Inc. (NYSE:BKS) will try to sell more toys this coming holiday season. This is expected to generate more sales for the company as it struggles to get up on its feet.

Barnes & Noble, is BKS a good stock to buy, toys, Laurie Schacht

In Barnes & Noble, Inc. (NYSE:BKS)’s latest quarterly report, the company did report narrowing its loss for the first quarter of its 2015 fiscal year. However, it still reported a consolidated net loss of $28.4 million, or $0.56 per share, on $1.2 billion in consolidated revenue, which is down 7% compared to the year-ago quarter. Nonetheless, the consolidated loss was better than the net loss of $87.0 million, or $1.56 per share, in the same quarter a year ago.

Schacht believes that toys may be able to help turn the tides for Barnes & Noble, Inc. (NYSE:BKS).

“[Toys are] going to be a very big part of their strategy and it’s actually a very smart part of their strategy. […] Parents are still buying children’s books and they are coming into that department. And instead of just the few items that they used to carry, they are creating real toy departments that you either have to walk through to get to the children’s books or are in the children’s books departments,” she said.

The problem with the bookseller, the publishing executive said, is that the company is struggling with sales of its Nook and digital goods division. This is compounded by the decline in physical book sales. She noted that she herself reads books on her Amazon.com, Inc. (NASDAQ:AMZN) Kindle and has not picked up a physical book in a long time.

With toys, Barnes & Noble, Inc. stands to get an added revenue stream apart from selling children’s books this coming holiday season, she said.

David Abrams’ Abrams Capital Management is a Barnes & Noble, Inc. (NYSE:BKS) investor. The hedge fund reported about 4.11 million shares in the company by the end of the second quarter.

Disclosure: None

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