With Barnes & Noble announcing that it is considering a sale of the company and other strategies, retail property owners have to be wondering if they are in for another round of big-box closures.

The chain's dilemma became more urgent after the company announced larger losses than expected in the first quarter of fiscal 2011. Sales for the quarter totaled $1.4 billion, a 21% increase over the prior year. But Barnes & Noble reported a consolidated net loss of $63 million over the quarter compared with a profit of $12.3 million in the same period a year earlier. Company shares closed at $15.29 on Aug. 25, down from a 52-week high of $25.07.

Barnes & Noble is the country's leading brick-and-mortar bookseller — a business strained by a decline in discretionary spending, intense competition from Amazon.com and the increasing popularity of e-readers.

Industry insiders wonder if Barnes & Noble might have to slim down its base of 1,300 stores in response to the changing book market. The consensus is that while the retailer will likely tweak its portfolio, it is unlikely to undertake massive store closings.

“The book business is challenging, but of the [players] out there, Barnes & Noble is probably the best positioned,” says Ivan L. Friedman, president and CEO of RCS Real Estate Advisors, a New York-based retail real estate consulting firm. “I think there could be selective closings for both Barnes & Noble and Borders, but nothing like what happened with Circuit City and Linens 'N Things.”

Taking the company private might be the best option for the firm, some experts think. It would enable Barnes & Noble to pare its store portfolio and develop its digital business without having to worry about Wall Street frowning upon the capital expenditures, writes Morningstar analyst Peter Wahlstrom.

Can the company attract a deep-pocketed buyer? Barnes & Noble founder Leonard Riggio has expressed a desire to acquire the chain in partnership with a private investor group, says Howard Davidowitz, chairman of Davidowitz & Associates, a New York-based retail consulting and investment banking firm. Riggio already owns 30% of the bookseller's outstanding shares. “Private equity wants somebody to bet their money with them and Riggio's money will be in it,” says Davidowitz.

Another shareholder, Yucaipa Cos. founder Ron Burkle, also appears interested, although industry insiders say Barnes & Noble's decision to put itself on the market has a lot to do with its desire to get rid of Burkle rather than sell to him. Earlier this year, the company enacted a “poison pill” to prevent Burkle from buying more than 20% of its stock.

The chain has emphasized its online division, and is marketing its e-reader, the Nook. It also has appointed digital expert William Lynch CEO. But retail consultants feel that actual books resonate with consumers. And Barnes & Noble offers a rich in-store experience with cafés and events such as readings and book signings.

“It makes sense to shrink the [store] fleet,” says Craig Johnson, president of Customer Growth Partners, a New Canaan, Conn.-based retail consulting firm. “But there is always going to be a role and a place for bookstores. Nobody particularly enjoyed having a proper CD, whereas there is a value in having a physical book. Some people simply prefer them.”

NAMES IN THE NEWS

Alan Pontius has been promoted to national director of commercial- leased investment properties at Marcus & Millichap Real Estate Investment Services in San Francisco. He will oversee all commercial-leased investment property divisions, including the national retail group. He will also remain director of the national office and industrial properties group.

Steve Morrows has been promoted to executive vice president and co-director of leasing at RFR Realty in New York. He previously was a senior vice president and leasing director for 375 Park Avenue, the Seagram Building. He will remain active in leasing other Manhattan buildings.

Tim D'Angelo has rejoined Grubb & Ellis Co. as senior vice president of the industrial group in Denver. He most recently was with Ringsby Realty, where he was director of industrial properties. D'Angelo has completed transactions valued in excess of $750 million.

Jaclyn Janssen has joined Pircher, Nichols & Meeks as a litigation attorney in Chicago. She will focus on real estate development, acquisitions, financing, foreclosures and construction. She graduated magna cum laude from the University of Wisconsin Law School.