A Nook-Free Future For Barnes & Noble? Founder Leonard Riggio Could Make It So
By Christopher Zara | February 27, 2013 2:28 AM EST
In a plot twist worthy of a Tom Clancy mystery novel, the founder of the country’s largest bookstore chain wants to get back to the business of selling books.
Barnes & Noble Inc. (NYSE:BKS) announced on Monday that Leonard Riggio, the company’s founder, chairman and largest shareholder, may propose to purchase all of the assets of Barnes & Noble’s retail business, including its chain of bricks-and-mortar bookstores and its website, barnesandnoble.com. The proposal would not include Nook Media LLC, through which the company manufactures its struggling Nook e-reader, nor would it include Barnes & Noble’s college-bookstore business.
In a Schedule 13D regulatory filing with the Securities and Exchange Commission, Riggio said the proposed buyout of Barnes & Noble would be primarily in cash and negotiated with the board and its advisors.
Although the Nook is viewed as as a costly digital albatross around Barnes & Noble’s neck -- while at the same time it's considered by many to be the company's best chance for survival in a changing marketplace -- the Nook has never managed to garner more than 25 to 30 percent of the e-book marketplace, compared with 60 percent for Amazon.com Inc. (NASDAQ:AMZN) and its ubiquitous Kindle devices.
Although the Nook is a strong revenue booster for Barnes & Noble, research and development of the product is expensive as e-reader devices are constantly evolving. It's expected that losses in Nook Media will be greater than they were the year-earlier period when the company reports fiscal 2013 third-quarter earnings on Thursday. Earlier this month, the company warned that annual revenue for the Nook unit will fall far below the $3 billion it projected in January. To make matters worse, the company said in January that it plans to close between 450 and 500 stores over the next decade.
Late last year, Barnes & Noble announced that it is selling a 5 percent stake in Nook Media to the British publishing company Pearson PLC (NYSE:PSO), which is attempting to capitalize on the growing market for educational e-books.
Barnes & Noble said in a press release on Monday that it could not guarantee whether Riggio’s buyout proposal would result in a transaction. The company said it did not intend to comment further, nor would it offer a timetable for negotiations. Upon the announcement, however, Barnes & Noble shares jumped 9.3 percent to $14.76 on Monday morning.
The first Barnes & Noble bookstore was opened by William Barnes and G. Clifford Noble in 1917. Riggio purchased the rights to the name in 1971 and founded Barnes & Noble Inc. The Fortune 500 company currently operates 689 stores in 50 states.
Shares were up 1.3 percent Tuesday morning to $15.22.
To contact the editor, e-mail:
Most Popular Slideshows
- Kristen Stewart Moving On With Nicholas Hoult, Jennifer Lawrence Dating Chris Martin – Reports [PHOTOS]
- Kate Middleton Suffocated in Kensington Palace, Queen Elizabeth Reported War With The Duchess [PHOTOS]
- 2014 MTV Video Music Awards: Everything To Know [PHOTOS]
- Chris Martin Dating Reports: Jennifer Lawrence Vs Gwyneth Paltrow [PHOTOS]
Join the Conversation
- The Burka Avenger Educates Children While Fighting For Girls' Education Rights In New Pakistan TV Show
- Christopher Walken To Play Mob Boss In Film Adaptation Of Four Seasons Musical 'Jersey Boys'
- William Cantrell Mistakes Human Ashes For Cocaine, May Have Snorted Remains
- Giant Alligator Eats 80-Pound Dog In North Carolina, Gator May Still Be Alive
- Steve McQueen's Last Ride, 1952 Custom Chevy Pickup Truck, Hits The Auction Block
- Robin Williams Goodbye Video Hoax: Facebook Users Warned of Celebrity Suicide Exploitation
- ISIS Posts Graphic Beheading Video of US Journalist James Foley
- Nexus 6 Release Date Dilemma with Motorola Shamu Details Pointing to Better Smartphone and Killer Features
- After James Foley, ISIL Threatens to Behead Another American Journalist Steven Sotloff
- Saudi Arabia: Brothers Beheaded For Smuggling Marijuana Into The Kingdom
- Moto X Android 4.4.4 KitKat Update Guide: AT&T/Sprint Release and When to Hit Your Region
- Motorola Moto X+1 On Release Date To Come With Snapdragon 800 Processor, 2 GB RAM, 4K Recording And 5.2-Inch Display