I visited B&N the other day -- tellingly not to buy anything but as a way to kill time while my daughter was shopping. What I saw gave me a serious case of deja vu -- where the book store used to be all, you know, books, there were now large sections dedicated to toys and games and collectibles and other such stuff.
This totally reminded me of the last days at CompUSA, when floor space originally all dedicated to computers and software was being used for DVD players and appliances and all kinds of odd stuff. I see the same thing now at Best Buy, with workout equipment and other oddball products. I told my son on a visit a year ago to Best Buy to expect to see the a larger appliance selection next time we visit. He asked why, and I said "because Wal-Mart does not generally sell them, and not a lot of people buy their large appliances at Amazon." Sure enough, you see more appliances nowadays.
I don't think that converting your over-sized book store into an under-sized department store is going to work. It is hard to shift a retail chain's positioning, though it is possible (anyone remember when the Gap was just a Levis store?) But things like leases and locations are really sticky, making it hard to change fast if your new concept needs more or less space or different locations.