Barnes & Noble Nook, e-book slump lead to big loss
By Phil Wahba
(Reuters) - Barnes & Noble Inc reported a net loss for the holiday quarter, hurt by a sharp decline in sales in its Nook device and e-books business, at a time that Chairman Leonard Riggio is trying to buy the company's profitable bookstore unit.
The company said earlier this week that Riggio plans to make an offer for the main bookstore business, but not its Nook and e-book business and its college bookstores.
Revenue at its Nook business, including e-books and devices, fell 25.9 percent to $316 million in the fiscal third quarter that ended January 26, as it sold fewer e-readers and tablets and had to cut prices, losing ground to big-pocketed tech rivals..
"It simply doesn't have the assets to make its tablet a useful productivity tool the way Apple and Google do," Forrester Research analyst James McQuivey said in a note.
Last year Barnes & Noble carved out Nook and its college bookstore business into a new unit called Nook Media. That has attracted investments from Microsoft Corp and Pearson LLC, but Barnes & Noble still owns 78 percent.
Barnes & Noble's weak quarter raised the odds of a deal that would divide the company, and shares finished the day up 3.3 percent.
"Barnes & Noble stands at a fork in the road and rather than choose one path, it will likely need to split into two companies," McQuivey said.
The loss on the Nook business more than doubled to $190.4 million and the disastrous holiday performance puts additional pressure to quickly find other investors for Nook. Continued...