Barnes & Noble to spin off struggling Nook business

Barnes & Noble to spin off struggling Nook business

Summary: The company announced the split Wednesday as it reported its fiscal 2014 fourth quarter earnings and revenue results.

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TOPICS: Tablets
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Retail bookseller Barnes & Noble will separate its Nook Media business into a separate public company. The beleaguered bookseller announced the split Wednesday as it reported its fiscal 2014 fourth quarter earnings and revenue results. 

Nook has long faced unyielding competition from Apple iPads and Amazon Kindles, and up-and-coming Android and Windows tablets. In June of 2013 Barnes & Noble announced it would no longer manufacture color Android-based tablets and instead focus on the core business of Nook eReaders. 

Clearly the focus was not enough to buoy the Nook business, as the ongoing struggle reflected in its earnings and took center stage as the impetus for separating Nook from its retail segment.

The bookseller said Nook posted a 22 percent decline in revenue to $87.1 million, with adjusted losses trimmed to $56 million. The retail side of Barnes & Noble managed to post a slight gain in revenue to $955.6 million.

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Michael P. Huesby, the company's CEO, said in a statement:

We believe we are now in a better position to begin in earnest those steps necessary to accomplish a separation of Nook Media and Barnes & Noble Retail. We have determined that these businesses will have the best chance of optimizing shareholder value if they are capitalized and operated separately. We fully expect that our Retail and NOOK Media businesses will continue to have long-term,successful business relationships with each other after separation.

The separation of the Nook Media business is expected to be completed by March 30, 2015.

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Topic: Tablets

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8 comments
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  • Sad :(

    I do hope that Barnes & Noble can manage to keep its head above water, so to speak. It's where I buy my books (paperback and, to a lesser extent, hardback).
    Rabid Howler Monkey
    • B&N

      Unfortunately it is also where I buy my eBooks.
      hayneiii@...
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        Ponvirs
  • Long term

    "We fully expect that our Retail and NOOK Media businesses will continue to have long-term, successful business relationships with each other after separation."
    ---
    With the Nook losing money like that (on almost no revenue) I wouldn't expect that 'term' to be very long at all, unfortunately.
    sandmich
  • Nook ebook library

    What does this mean for customers with Nook ebooks? I realize if B&N folds my investment is down the drain but for now if I have the Nook app on my Android and Apple devices is my investment safe? Will I continue to be able to buy Nook ebooks?
    MajorlyCool
  • Nook Survivability

    I'm happy to see this happen. Hopefully it will result in a more concerted effort to market the Nook software (if not the actual devices that run it) for the strengths that it has.

    Frankly I don't consider iPads and Surfaces as competitors to Nooks and Kindles, because the iOS and Win8 software apps are inferior to the native experiences on the devices. But in some respects, the Nook software is superior to the Kindle software. I do periodicals exclusively on the Nook (and abandoned all magazines on the Kindle) because the Nook experience is far superior for that purpose. Unfortunately, because the eBook ecosystem is inferior, as well as the online shopping experience (vis-a-vis Kindle and Amazon.com), that I continue to do eBooks on the Kindle.

    One exception to non-native software, though, is that the Nook software on Android 4.4 is pretty darn good for the magazine experience (so is the Kindle eBook reader), and I'm actually starting to do a lot more reading on my Nexus 5 than I am on either the Nook or the Kindle devices themselves. Maybe the Android apps are superior on the phone because, at its core, both the Nook and Kindle are android-derived devices.
    Lawrence Garvin
  • B&N - matter of strategy

    B&N could have blown Amazon out of the water years ago, and had so much more resources, but failed in management and strategy. Now it will never be and its own survival is at stake. Good case study material. It is all about strategy, and enabling management.
    Backbutton
  • Odd how the mediorce wins the markets

    Like Apple's phones/tablets and VHS in VCRs the winner in eBook readers is a rather lacklustre device - the Kindle line.

    We have 2 Nooks, 2 Kobos and a Kindle in the house and the Nooks are by far the superior device like Betamax, with the Kobos a close second. The Kindle, while 'okay' is not the best of the bunch, but it is the VHS of ereaders.

    The Nook ST is a much nicer device to handle than a Kindle touch and is also better specified and you can expand the memory with microSD cards. The Kindle can't do that - the Kindle can't even remember WiFi passwords either!

    Let's hope the Nook business gets bought by another major player, perhaps its an opportunity for Kobo (owned by Rakuten) who recently took over Sony's ereader customer base.
    Lord Minty