Barnes & Noble Inc. Chairman Leonard Riggio will retire from the company he founded more than 50 years ago, ending a career that helped transform the U.S. retail landscape by ushering in the era of big-box stores and changing the way Americans shopped for books.
Riggio, 75, will be replaced as chairman in September by director Paul Guenther, the company said in a statement on Wednesday. Chief Executive Officer Ron Boire, who now reports to Riggio, will report to the full board. With a 17 percent stake, Riggio is Barnes & Noble’s largest shareholder. He said he plans to remain an investor and board member.
“I have complete confidence in the management team and their ability to take this company to the next level of bookselling,” Riggio said in the statement. “I have every intention of offering my help and support.”
Riggio has long been considered a visionary for disrupting the book-selling business. He started the company in 1965 with one store offering low-cost college textbooks. A few years later, he bought the Barnes & Noble name and its Manhattan flagship store, beginning a spree of acquisitions, including mall mainstay B. Dalton, that turned the company into the biggest U.S. bookstore chain.
By the 1990s, Barnes & Noble had started focusing on superstores instead of malls. By dotting the U.S. with gigantic outlets that offered lower prices, wider selection and amenities such as coffee shops, the company decimated chains with smaller stores. Along with some early peers, Barnes & Noble offered a template for a new era of big-box retail that eventually would be used in a wide swath of categories, from office supplies and housewares to electronics and home improvement.
Those big-box locations, mostly in the suburbs, have since become an albatross for Barnes & Noble and its peers after brick-and-mortar booksellers were hurt by online competition. It’s not a coincidence that the rise of Internet giant Amazon.com, which began as a bookseller, has coincided with Barnes & Noble’s diminishing fortunes.
The chain has been especially hit hard by the rise of digital media and e-books. To his credit, Riggio anticipated the trend and developed Barnes & Noble’s own line of e-readers and tablets under the Nook brand. But after some initial success, that effort imploded under competition from tech giants like Apple.
With that backdrop, Riggio is leaving a company with its future in doubt. Last year, Barnes & Noble spun off its college bookstore unit into its own public concern. That leaves a company with 640 stores, an e-commerce site and an e-book unit still struggling for relevance. While sales at its locations have stopped declining, growth prospects are dim.
Meanwhile, Amazon is testing a physical bookstore and may open hundreds more.