“Maybe we’ll just go with ‘Barnes’”…B&N considers spinning off the NOOK business
Back in June, I said this about Barnes & Noble:
“They are doing some smart things, and I think there is a good chance they’ll survive…even if that doesn’t mean having anywhere near the brick-and-mortar presence they did before (at least for books).”
Well, in this fascinating
Barnes & Noble talks about their holiday quarter sales.
They suggest that they might separate the NOOK business from the physical bookstores.
That’s been the headline news, certainly, and it’s important.
However, there are several significant elements in the information they provided:
- The NOOK Simple Touch underperformed, although it did well. They assure us that they will continue to market it for “years to come”, but they say “…the Company over-anticipated the growth in consumer demand for single purpose black-and-white reading devices this holiday. ” One scary interpretation for them is that, if Amazon offers something similar, people will choose Amazon over Barnes & Noble. Did people choose the Kindle Fire over the NOOK Tablet? Did they choose the Kindle Touch over the NOOK Simple Touch? That seems likely
- They are really looking to take the NOOK international…that’s a place where Amazon has really led the way
- “Physical book sales on a comparable basis increased by 4% at Barnes & Noble stores, exhibiting growth for the first time in five years.” Yes, physical book sales are up…in the stores. This next piece struck me as possibly a serious, serious problem: ”…This increase was driven by continued growth of the NOOK business, offset by a decline in online physical product sales.” The online business is down? That’s the future…that should be growing, as it was for other people. Is Amazon Prime cutting into this? Barnes & Noble has their own member free express shipping program…but Amazon is now giving free streaming videos and the ability to borrow up to a book a month (from a certain set of books)
- Toy sales are up…again
- Barnes & Noble College bookstore sales are expected to be “flat”…that’s okay
What did investors think of this?
The stock is down more than 21% in the last five days.
That doesn’t mean that things are over. However, the future may not look like the past…or like the future they expected.
Coincidentally, as I was driving past the shuttered Borders near me this morning, a worker was finally taking the name off the building…
- Wall Street Journal: “Barnes & Noble May Separate Nook Business as Losses Mount”
- Fortune: “Yes B&N, cut the Nook loose”
- CBS: “Barnes & Noble shares dip again”
This post by Bufo Calvin originally appeared in the I Love My Kindle blog.