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 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.
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.
Shares of Barnes & Noble, which also reported a smaller-than-expected loss, rose as much as 4.3 percent to a two-year high of $24.40 in early trading.
Barnes & Noble's retail core comparable store sales, excluding its Nook digital unit and college bookstores, fell 0.4 percent in the first quarter ended Aug. 2.
Analysts polled by research firm Consensus Metrix were expecting same-store sales to decline 2 percent.
There's an old saying about a new year and a new beginning, and Barnes & Noble is taking it to an extreme. Over the past few weeks no fewer than 4 members of the senior management at Nook Media, B&N's ebook sub, have either left the company, been promoted, or announced that they have one foot out the door.
The first to go was Michael Huseby. Barnes & Noble announced on 8 January that Huseby was leaving his position as head of Nook Media to take the CEO position at Barnes & Noble.