March 28, 2024

DealBook: Barnes & Noble Considers Spinning Off Its Nook Unit

The company sees a bright future for the Nook.David Paul Morris/Bloomberg NewsThe company sees a bright future for the Nook.

Barnes Noble‘s Nook is selling exceptionally well, by the company’s reckoning. So the bookseller is considering spinning off the e-reader unit.

The company said on Thursday that it was beginning “strategic exploratory work” to separate the Nook division, in an effort to help the nascent business grow.

But a spinoff of the unit would raise questions about Barnes Noble’s ultimate fate. While holiday sales tied to the Nook, including both devices and digital content, rose 43 percent from the period a year earlier, the company’s brick-and-mortar sales rose just 2.5 percent.

And Barnes Noble said that it now expected to report a loss of $1.10 to $1.40 a share for this year, sending the company’s shares plunging nearly 30 percent in premarket trading.

Barnes Noble’s stock has fallen 5.2 percent in the last 12 months, closing at $13.55 on Wednesday.

Still, the company forecasts a bright future for the Nook, having endured many quarterly losses while investing heavily in the business. Barnes Noble said it was currently considering reporting Nook-related sales as a separate business segment, and added that it was in talks with potential partners to expand the Nook’s presence abroad.

“We see substantial value in what we’ve built with our Nook business in only two years, and we believe it’s the right time to investigate our options to unlock that value,” William J. Lynch Jr., Barnes Noble’s chief executive, said in a statement.

The Nook’s numbers were not all rosy, however. Barnes Noble acknowledged that it had ordered too many of its black-and-white Nook devices, which fell short of sales expectations.

The potential spinoff is the latest strategic plan that Barnes Noble has explored in the last two years. The company previously shopped itself around, before deciding in August to sell a minority stake to Liberty Media for $204 million.

And it is has put its Sterling Publishing unit up for sale, according to the Media Decoder blog.

Article source: http://feeds.nytimes.com/click.phdo?i=2ad466d6c070426ce123d40d3030e569

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