Barnes & Noble Might Spin Off Nook Business
January 6, 2012 10:46 AM
comment(s) - last by
Spinoff is under review
Barnes & Noble is one of the larger booksellers in the U.S. and the company also has a line of popular eReaders as well. The B&N Nook line of eReaders is large and varied with models to go head to head with just about any other makers including Amazon. B&N launched its Nook Tablet not long ago as a counter to the Kindle Fire.
Over the holidays, B&N sold a massive number of eReaders with the 9-week period ending on December 31 seeing sales increase over 70% compared to the same period the years before. B&N noted that its Nook Simple Touch didn't meet the sales expectation that the company expected, the
exceeded expectations. The company say that as a clear indication that buyers wanted color devices.
The company also talked about digital content sales. It expects shares of digital content in fiscal 2012 to be around $450 million. With the importance of the Nook and digital content weighing so heavily into the B&N mix, the company announced that it will review plans to separate the Nook business from the other Barnes & Noble operations. The split will have B&N reporting the Nook as a separate operating segment of its business.
“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,” said William Lynch, Chief Executive Officer of Barnes & Noble. “In NOOK, we’ve established one of the world’s best retail platforms for the sale of digital copyright content. We have a large and growing installed base of millions of satisfied customers buying digital content from us, and we have a NOOK business that’s growing rapidly year-over-year and should be approximately $1.5 billion in comparable sales this fiscal year. Between continued projected growth in the U.S., and the opportunity for NOOK internationally in the next 12 months, we expect the business to continue to scale rapidly for the foreseeable future.”
B&N is offering no guarantee that the Nook business will split at this point and notes it is reviewing the possibility for now. There is no timetable for the review to complete and there will be no more talk about the review until the decision to split the Nook has been made. There was also mention of the possibility of expanding Nook sales overseas.
Barnes & Noble
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1/10/2012 2:02:31 PM
I predict that 10 years from now Barnes and Noble will be bankrupt if they spin off Nook now. Print media is just beginning to feel the pull of the electronic formats. They have already taken out the music retailers.
1/10/2012 5:47:22 PM
The announcement is of an administrative split. That would be a good thing for B&N Bookstores and B&N Nook.
Each will continue to be a B&N business with the close ties that the B&N Holding company can enforce on it's subsidiaries. At the same time the bookstore division can concentrate on sales of books and maintaining the stores while Nook can concentrate on getting content deals and improving the hardware. Their marketing departments should still work together to promote Nook in the bookstore and the bookstore in Nook content.
In the event that the holding company's directors decide either side of the business is no longer part of their vision they can kill or sell without worry about damage to the other side :)
1/25/2012 10:02:44 PM
I don't agree. The B&N magnet company owns Gamestop, for example. If it makes financial sense (which is always priority one) for the company to do something like a spin-off, they will.
"We’re Apple. We don’t wear suits. We don’t even own suits." -- Apple CEO Steve Jobs
Barnes & Noble Readies NOOK Tablet to Take on Kindle Fire
November 7, 2011, 11:25 AM
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