Reports of Barnes & Noble's death have been greatly exaggerated.

So claims The New Yorker's James Surowiecki in his latest Financial Page column, arguing that those who point to the resignation of CEO William Lynch and the collapse of Lynch's signature digital Nook division are only telling half of the story. And what an easy story it is to tell—an embarrassing resignation now sounds the death knell for an antiquated business model (if not industry) felled by the proliferation of cheap e-books and Amazon Prime. It is a story we have seen before.

Not so fast.

The truth, Surowiecki argues, doesn't fit quite so neatly into that narrative. In fact, Barnes & Noble is doing well in the most unexpected area: its retail business is doing well, and "though its sales fell last year, its profits actually rose." A small handful of factors have contributed to this odd turn of events. While Borders' 2011 bankruptcy may have seemed a nail in Barnes & Noble's coffin, for one, the lack of a major competitor has quite helped the latter company: 

Its operations, thanks to better inventory management, are more efficient: it can make more money while selling fewer books. The Nook is the only part of the business that’s losing money. Being a book retailer isn’t easy—thanks, above all, to Amazon—but Borders’ bankruptcy, in 2011, left B. & N. without a major national competitor. “In this market, you could actually pick up market share simply because you’re the only major bookseller left,” John Tinker, a media analyst at the Maxim Group, told me. And B. & N. has generally avoided the expensive, long leases that can drain a retailer’s cash flow; many of its leases are short—which gives it flexibility in terms of moving or downsizing—and, since its stores generate foot traffic (which is good for surrounding stores), it has considerable leverage with landlords. B. & N., which still has more than six hundred retail stores (and six hundred and eighty-six college bookstores), also retains considerable leverage with publishers.

Writing for Surowiecki's old Moneybox column, Slate's Matthew Yglesias has sneered at the chain's "technologically obsolete business and dying industry." But, Surowiecki responds, perhaps the most radical thing the Barnes & Noble could do at this point is simply what it has always done best: resisting the end-times prophecies by being a good old brick-and-mortar bookstore. Consider:

Independent bookstores are now thriving, thanks in large part to their close ties to both publishers and customers. “Stores that can help you not just find what you’re looking for but also help you discover books you haven’t heard of are still very valuable to readers,” says Daniel Raff, a management professor at Wharton who’s written an in-depth study of Borders and B. & N. [ ... ] For many people, as a number of studies show, reading is a genuinely tactile experience—how a book feels and looks has a material impact on how we feel about reading. This isn’t necessarily Luddism or nostalgia. The truth is that the book is an exceptionally good piece of technology—easy to read, portable, durable, and inexpensive.

The fallacy underpinning premature obituaries of the bookstore industry is a tendency to draw parallels with the music industry, which experienced a sudden—and irreversible—downturn last decade when music downloads devastated album sales and closed both small and large record stores. The speed of the shift was shocking—and so observers have learned to be pessimistic. 

There are similarities, to be sure. But they are not the same.

For one thing, the book as a medium is more malleable, more convenient, more loved, and far more well-established than the compact disc ever was. (Remember: by the time Napster popped up in 1999, CDs had only been commercially available for about 17 years. Scoff at nostalgia if you will, but vintage fetishism has sparked quite a resurgence in the vinyl market.) And the rise of file-sharing and music downloads around the turn of the century was primarily driven by web-savvy young people. They have not turned up for e-books in the same staggering numbers; e-book sales rose only 44 percent last year, Surowiecki reports, and Codex Group has found that "people of all ages still prefer print for serious reading." 

Teens and twenty-somethings turned to file-sharing and music piracy not to get it cheap—as Amazon offers—but to get it for free, legally or not. There is not much of a comparable option in the book world, unless you like clicking through the page gaps in Google Books' limited preview mode. Meanwhile, perhaps learning the record industry's lesson, booksellers have done a far better, and faster, job of adapting to the market. (And Amazon Prime might beat your Barnes & Noble hardcover rack, but it may not beat a locally owned used bookstore's $4 paperback bin.)

That's not to say Barnes & Noble is in the clear. But nor is it on its last legs.