Bookseller’s future currently hangs in the balance
Founder and chairman of Barnes and Noble, Leonard Riggio, announced on Tuesday that he will not follow through with his plan to buy 675 of the company’s bookstores. This news accompanies Barnes and Noble’s earnings statement, which was also downtrodden, showing a loss of more than double from the previous year. The company reported a net loss of $87 million, or $1.56 per share, for the quarter ending July 27, compared to a loss of $39.8 million, or 76 cents per share in the same time of 2012. Revenue from the retailer’s Nook business, including devices and e-books, fell more than 20 percent, down to $153 million, and same-store sales dropped 9.1 percent.
In February, Riggio stated his intentions to buy Barnes and Noble stores, leaving the Nook e-book business as a separate company. A price was never disclosed, but the board was said to be unwilling to accept anything less than $1 billion. A formal offer was never made by Riggio, who is currently running the company after the resignation of CEO William Lynch, Jr. on July 8. “While I reserve the right to pursue an offer in the future, I believe it is in the company’s best interests to focus on the business at hand,” he said in a statement.
Barnes and Noble also reinstated plans to release at least one nook device for the upcoming holiday season, and new nook products are in development. In June, the company announced it would no longer make tablets, unless a partner was found. Microsoft and Barnes and Noble are currently in discussions to expand their current partnership as talks have come to a close regarding the sale of Nook Media to the software giant.
The noise of Riggio’s impending purchase may have quieted, but the problems for Barnes and Noble continue to escalate. The brick-and-mortar based company must figure out a way to sell books in an increasingly digital world that favors rivals, like Amazon, that are web-based. Increasing in-store traffic through means of creative marketing, with a little help from publishers — who desperately want Barnes and Noble to display their titles — might be the first step to help turn Barnes and Nobel’s retail stores into a digital-world advantage.