Barnes & Noble Inc.
Indie bookstores have been resurgent in recent years, filling the void of brick-and-mortar shopping left by closing big-box bookstores. How are these bookshops succeeding where Borders buckled? Housing Works Bookstore Café, part of the Housing Works charity in New York City, which provides housing and other services to people living with HIV/Aids, perfectly exemplifies the answer. While walking into a generic big-box bookstore feels a lot like shopping at a slightly more expensive, slightly less convenient version of Amazon, walking into Housing Works feels worlds apart.
The Barnes & Noble shopping bag spent years promoting a product-the Nook e-reader, an also-ran rival to the Amazon Kindle-that was intended virtually to eliminate the need for bookstore shopping bags. It didn't work. Now B&N has decided to use its shopping bags to emphasize something Amazon.com doesn't offer: bookstores that offer handsome plastic bags.
"You don't get a shopping bag when you shop online-you get a box," says Glenn Kaplan, Barnes & Noble's creative director. The company distributes more than 90 million bags a year, making the totes one of its most effective advertising campaigns.
Barnes & Noble Inc. remains committed to its money-losing Nook digital book, e-reader and tablet business even as sales in the unit continue to plunge. "We aren't giving up on Nook by any stretch of the imagination," said Chief Executive Michael Huseby in an interview. "E-readers and tablets aren't going to be a big business for us going forward. The industry itself is declining. We are trying to sell more digital content going forward."
So far that's not happening. Digital content sales slumped 29% in the fiscal third quarter, Barnes & Noble reported Tuesday.
Barnes & Noble has made an investment in Flashnotes, an online marketplace where college students can buy and sell their notes from class. The deal, announced this morning, was made through the bookseller's Barnes & Noble Education unit, in advance of its expected spinoff of the division from the company. In a news releasing announcing the deal, the company said the investment reflects the education unit's broader plan "to pursue strategic opportunities in the growing educational services markets."
Barnes & Noble intends to separate its college business from its Nook and retail businesses, it announced Thursday, creating two separate publicly traded companies. The move is supposed to be completed by August.
B&N CEO Michael Huseby pulled out all the possible jargon to describe the split:
Separating Barnes & Noble Education will create an industry-leading, pure-play public company with more flexibility to pursue strategic opportunities in the growing educational services markets.
The e-commerce giant has inked deals with three major universities to run websites selling all sorts of college students' delectables, including textbooks, college-themed apparel and ramen noodles, the Wall Street Journal reports. Students at Purdue University, the University of Massachusetts Amherst and the University of California Davis can use the new co-branded website to place orders.
The campus initiative gives unlimited next-day on-campus delivery to Amazon Student Prime members (quicker than the two-day delivery for regular Amazon Prime customers). Also as a part of the deal
Barnes & Noble Inc. said Thursday that Nook sales plunged 55% in the holiday season, amid plans by the largest U.S. bookstore chain to separate its struggling, but profitable, retail businesses and weak Nook operations.
Overall sales in the Nook segment, which includes the devices and accessories as well as digital content, fell to $56 million. Device and accessories sales fell 68% to $28.5 million, while digital content sales were down 25% to $27.4 million compared with a year ago.
Barnes & Noble combines a low stock-market valuation with a solid fundamental story that is still underappreciated. Shares of the country's dominant bricks-and-mortar bookseller have risen 39%, to $23, since Barron's published a bullish feature last spring ("Why Barnes & Noble Could Double," May 26). But they could hit the $30s in 2015 if the company separates Nook, its digital unit, from the rest of its business by August, as expected. Barron's sum-of-the-parts valuation for B&N (ticker: BKS) was $36 in our article; if anything, that was conservative, as it assigned no value to Nook.
Barnes & Noble Inc. (BKS), the largest U.S. bookstore chain, bought back Pearson Plc's stake in its Nook Media e-reader division for about $28 million, giving it complete ownership of the business.
Pearson's stake was purchased for $13.8 million and about 603,000 shares of common stock, New York-based Barnes & Noble said in a regulatory filing today.
The agreement gives Barnes & Noble more flexibility to rid itself of the struggling unit, a move investors have urged for years and that the company agreed to pursue in June.
Now that Amazon AMZN has swept away its competition in the $3 billion U.S. e-book business through years of aggressive discounting, it's starting to make peace with publishers, which should mean more profits at the world's largest bookseller. In recent months, Amazon has signed new contracts with three of the world's five largest publishers: Legardere's Hachette, CBS Simon & Schuster and most recently, Macmillan. Those contracts return much of the pricing control of e-books back to the publishers. Not long ago, Amazon fought hard for