The bookseller is testing out new store concepts in an effort to boost profitability as Amazon.com and digital commerce put pressure on its sales. In keeping with that effort, Barnes & Noble has opened a total of five Barnes & Noble Kitchen units over just these past 18 months: fast-casual restaurants within bookstores, serving up breakfast, lunch and dinner, as well as beer and wine. The latest Barnes & Noble Kitchen opened at the One Loudoun mixed-use development, in Ashburn, Va., in November. 

“They really set it up to be a more comfortable, open and inviting experience, whether you are just going there to sit and have a glass of wine and bring your laptop, or if you are going to be shopping,” said Greg Goldberg, Eastern division vice president and leasing director at Retail Properties of America, which owns One Loudoun. Customers are welcome to take their food or beverages with them through the store while they shop, Goldberg says.

The Kitchen stores are a new twist on the existing Barnes & Noble Cafés the company introduced in the early 1990s and which feature in-store Starbucks shops. The restaurant component gives customers another reason to visit stores, and the beer and wine sales help increase the evening traffic, notes Goldberg. “What they really did here,” he said, “was just take it to the next level.”

Barnes & Noble is trying out Kitchen prototypes measuring between 5,000 and 21,000 square feet, at locations in California, New York, Minnesota and Texas. The 17,700-square-foot One Loudoun store is located in a freestanding building near other restaurants, shops, a gym and a movie theater. “All the feedback that we are getting is that everyone loves it,” said Goldberg. The new stores fit well into that lifestyle center, where people are walking about and enjoying the experience, he says.

This restaurant concept holds much appeal, given the experiential aspect consumers want in their shopping today, says Taylor Coyne, a senior research analyst at JLL. Barnes & Noble is also testing smaller stores and a more curated selection of books, tailored to the consumers in a specific market, Coyne notes. “Paying attention to who is around your stores is all part of this strategy that’s all about listening to the demographics, creating an experience and building a community,” said Coyne.

Barnes & Noble has been working to reverse its declining same-store sales. The company reported that sales during the nine-week holiday shopping season dropped by 6.4 percent, and its forecast for fiscal 2018 is for same-store sales in the low single digits. “Obviously, we have seen bookstores in the headlines for struggling times for quite a while now,” said Coyne. According to JLL, the book sector has one of the highest penetration rates from e-commerce, at nearly 25 percent.

Barnes & Noble executives are interested in creating smaller stores. “We believe that our store base today is too big at roughly 26,000 square feet per store, and we believe that the future store format will be much smaller than that,” said CEO Demos Parneros on the company’s fiscal second-quarter 2018 earnings call, in November.

Currently, Barnes & Noble operates 632 stores in the U.S. The company is using the test stores to study space productivity options across its various categories: books, gifts and more. “We are still learning from all these new stores that we’ve opened across the country, and we are excited about the knowledge that we’re gaining,” said Parneros.

Barnes & Noble sees about 120 leases expire each year. Its store and real estate teams are assessing locations and sales to make decisions about underperforming stores, and the company has said that it expects to have net positive store-growth return in 2018. 

Meanwhile, observers anticipate that things will only become more interesting, for Barnes & Noble and other retail brands as well. “I think we’re in an age of a retail evolution,” said Coyne, “and I do think this is a great opportunity for all retailers to get creative in how they want to evolve their brand.”