Barnes & Noble Considers Losing the Nook

By Bizclik Editor

 

 

Barnes & Noble saw strong sales of its Nook eReader over the nine-week holiday shopping period. Sales for the Nook were so strong that the bookseller may sell off the entire Nook division.

Sure, that sounds a bit big-business-backward at first, but it makes perfect sense to Barnes & Noble, which announced that it is considering spinning off the costly Nook unit of its business in order to give it room to thrive in an increasingly competitive market.

“We see substantial value in what we’ve built with our NOOK business in only two years and we believe it’s the right time to investigate our options to unlock that value,” said Barnes & Noble CEO William Lynch in a statement.

While Nook holiday sales increased this year by 43 percent, the Nook still sits firmly in the shadow of Amazon’s Kindle—the clear leader in eReader sales. In order to continue to compete with the Kindle, Barnes & Noble will need to invest heavily in new software, hardware and advertisements—a venture that may prove to be unfavorable with investors.

See Related Stories from Business Review USA:

Amazon to Fix Kindle Fire Complaints with Major Update

Barnes & Noble Unveils Nook Tablet, Slams Amazon Kindle

Barnes & Noble’s New Nook Simple Touch Reader

“The Nook business has been a growth business for Barnes & Noble,” said Forrester Research Senior Analyst Sarah Rotman Epps. “But there’s no doubt that continued growth and international expansion will take sustained investment that Barnes & Noble shareholders will not have the patience for.”

According to the New York Times, another analyst estimates that Barnes & Noble spends $200 million to $250 million a year on the Nook.

So who will scoop up the Nook business if and when Barnes & Noble sets it free? Analysts have thrown out a variety of names, from Google to Liberty Media. Maxim Group senior media analyst John Tinker thinks the Nook would be served well by a traditional retailer.

“Companies such as Wal-Mart no longer have DVDs as a loss leader to create foot traffic,” Tinker said. “[They] are losing on the customer loyalty front to Amazon.”

At any rate, we’ll have to sit tight and wait to see what Barnes & Noble actually decides to do with Nook. The company is reviewing its options and said that it will not comment further on the matter until a final decision is made.

Share

Featured Articles

Possibilities endless as generative AI takes centre stage

Generative AI is already playing a pivotal role in the way companies are run; the only question is how quickly it can be integrated into everyday tasks

Why companies should be preparing for scope 3 reporting

With a decision looming on the SEC’s proposed changes to climate-related disclosures, leaders should be examining supplier sustainability credentials

People over profit is steering business in a new direction

An unsettling few years has resulted in more and more companies hiring Chief People Officers to implement a culture that prioritises employee wellbeing

Databricks: The phenomenal rise of a data and AI heavyweight

Technology & AI

Business Chief expands portfolio with new look and coverage

Leadership & Strategy

Google at 25: The remarkable rise of a technology colossus

Technology & AI