They thought they'd found their white knight when Elliot Management Corporation, the same hedge fund that purchased Waterstone's in the U.K., bought them last August.
Flash-forward to seven months later. B&N has closed over 400 of their stores thanks to the outbreak of COVID-19. States and cities with stay-at-home orders rarely list bookstores as essential operations. So a company already teetering on the edge has no lifeline.
They've still been selling paper books and e-books to the public for the last two months. But another issue has arisen. This week, B&N told Draft2Digital ("D2D"), an e-book distribution company, they would only pay 30% of the revenue owed to D2D's customers.
Excuse me?
I get that D2D is trying to make things right with their customers. D2D may have made their own position worse by taking out a loan to cover the other 70% of what B&N owes to D2D's clients/writers. Given the current economic situation, covering a third party's debt can put your own business in a precarious situation.
On the other side is Smashwords ("SW"), who has announced they are receiving the full amount owed to their customers.
Since I go direct with B&N, I have no idea if I'll receive the funds due to me. I guess I'll find out next week. On one hand, I can afford their lack of payment from a business perspective. On the other hand, do I need to start pulling my books off their site again?
I had to do this five years ago when B&N was having problems. I've been gradually restoring the Angry Sheep catalog to B&N. Instead of spending next week writing and editing to get Magick and Murder out on time, I'll have to spend part of that time dealing with this mess.
I wish I could say I was surprised by all this, but I'm not. The traditional publishing companies have been approaching the same cliff as B&N. It'll be interesting to see which companies survive the side effects of COVID-19.
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