Len Riggio's latest plot twist for Barnes & Noble
The struggling bookseller's chairman wants to buy the retail operation and leave the rest separate. Could the Nook's days be numbered?
I recall spending many a Saturday and Sunday afternoon thumbing through the huge racks of magazines at my local Barnes & Noble. I'd plop down with my reading material at one of the cafe tables and order a caffeinated beverage and a baked good. After I finished reading, I'd hand my dirty dishes to the cheerful staff and leave the magazines for someone else to put away.
The total cost of a day's entertainment -- less than $10.
Fast forward more than a decade, and the impact of freeloading customers like myself -- not to mention the likes of Amazon.com (AMZN) -- has taken its toll on the New York retailer. It reported a dismal holiday season with revenue falling 10.9% to $1.2 billion amid a disappointing performance from its Nook e-reader business. Change, though, is coming.
Chairman Leonard Riggio, the present-day company's founder and largest shareholder, is interested in buying Barnes & Noble's retail business. These 689 bookstores generated $996 million in sales in the quarter ended in October, while its college bookstores, which Riggio isn't gunning for, had $773 million in sales during that same period, according to Bloomberg News. In a separate development, The New York Times reported that Barnes & Noble may scrap its Nook e-reader because it has failed to spur sustained consumer interest.
Riggio's plan isn't without risk. For one thing, as CNBC noted, he would need the support of Liberty Media (LMCA), which acquired a stake in Barnes & Noble in 2011. Similar deals have also run into problems. Best Buy (BBY) founder Richard Schulze hasn't been able to get financing for his deal to take the beleaguered consumer electronics firm private. And some Dell (DELL) shareholders are balking at CEO Michael Dell's planned $24.4 billion buyout of the tech bellwether he's doing with Silver Lake Management, arguing it undervalues the company.
As for the Nook, its future has been cloudy for a while. Though Microsoft (MSFT) (Microsoft owns and publishes moneyNOW, an MSN Money site.) has invested $300 million in Nook, and the e-reader has gotten some favorable reviews, it has has failed to gain much traction against much larger rivals such as Apple (AAPL) and Amazon. Its chances for future success seem pretty dim.
Riggio, however, seems intent on writing at least one more chapter in the Barnes & Noble saga.
--Jonathan Berr doesn't own shares of the listed stocks. Follow him on Twitter @jdberr.
- Sequester: The military girds for a blow
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
A former American Express CEO says he has the remedy for America's struggling economy and unfair tax system.
- Is Abercrombie just for skinny kids?
- Here's why a pigeon just sold for $400,000
- Detroit puts the pedal to the metal this summer
- Meet the class of 2013, the most indebted yet
- Welcome to the future: 3-D printable pizza
- Apple's stock is slipping, but its brand value isn't
- Oklahoma tornado losses could top $2 billion
- Target blames weather for soggy results
- Canada grabs for America's foreign skilled workers
[BRIEFING.COM] The S&P 500 trades lower by 0.6% as today's session enters its final hour.
In the foreign exchange market, the Dollar Index has continued its recent strength. Today, the Index trades higher by 0.5% at 84.32 with the bulk of the dollar strength coming at the expense of Australian dollar and the Canadian dollar.
The AUDUSD pair is off by 120 pips near .9680 as trade pushes to a fresh 11-month low. The .9600 area reveals multi-year support for the pair which has ... More
More Market News
This fund seeks to balance high quality and high yield, but with the market at these heights it's not without risk.