New York – Barnes & Noble’s board of directors has given the chain’s management team the OK to split the company into separate retail and Nook Media businesses.
The bookseller said it hopes to complete the separation of its bookstore and Nook operations by next March.
“We have determined that these businesses will have the best chance of optimizing shareholder value if they are capitalized and operated separately,” said CEO Michael Huseby. He added that the two units are expected to maintain “long-term, successful business relationships with each other after the separation.”
The move to detach the troubled tablet and e-reader subsidiary comes as the digital division’s revenue fell 22.3 percent to $87.1 million during the fiscal fourth quarter ended May 3, and declined 35.2 percent for the full year, to $506 million. During the quarter, device and accessories sales dropped 30.1 percent to $25 million due to lower unit volume and prices, while digital content sales fell 18.7 percent to $62 million.
College bookstore revenue, which also falls under Nook’s umbrella, increased 18.2 percent to $298.3 million and comps declined 2.7 percent.
Barnes & Noble has been attempting to buttress the Nook business by narrowing its assortment, downsizing its staff and developing a co-branded Galaxy Tab 4 with Samsung that’s due out in August.
By comparison, retail segment sales, including in-store and online, edged up 0.8 percent to $955.6 million, and comp sales excluding Nook products slipped 1.9 percent.
The company posted a net loss for the fourth quarter of $36.7 million, compared to a year-ago net loss of $114.8 million.
In a research note, Janney Capital Markets retail analyst David Strasser guesstimated the value of the Nook Media segment, including the college business, in the $560 million-$800 million range.
“In the past we have assigned zero value to the Nook business as it operates at significant losses,” he noted, but upped his assessment “post the deal with Samsung and renewed focus on the digital business.”
Microsoft and educational company Pearson hold minority positions in Nook Media.
- 2019 TWICE Top 100: Watch List - May 23, 2019
- 2019 TWICE Top 100: Consumer-Direct Sales Dominate The Charts - May 22, 2019
- 2019 TWICE Top 100: Best Buy Keeps The CE Crown, But Barely - May 21, 2019