When it was announced that William Lynch, CEO at Barnes & Noble (NYSE:BKS), had resigned Monday (July 9) night, was it further evidence of an imminent sale of the chain, or at least the sale of a big chunk of the chain? Need further proof? How about a $6.8 billion chain (used to be much more) that declares that it doesn't really need a CEO any time soon.
Really. Mary Ellen Keating, spokesperson for the 675-store bookseller, told The New York Times: "Because the company is in a transition period, we have no immediate plans to name a CEO." Transition to new ownership perhaps?
Normally, a CEO resignation could simply be the result of some horrible earnings reports—and the chain has certainly not disappointed in that area recently—but the chain has already confirmed multiple key ownership change potentials. There's the offer from Barnes & Noble Chairman Leonard Riggio to buy all of the chain's bookstores, a move that the full board has said it's exploring. And Microsoft has reportedly offered a billion dollars for Nook Media, a move that would complete the chain's split.
Although the chain went out of its way to not replace the CEO, it did announce some management promotions to keep operations flowing during this period of, let's say, significant employee distraction. "Michael P. Huseby has been appointed Chief Executive Officer of NOOK Media LLC and President of Barnes & Noble. Max J. Roberts, Chief Executive Officer of Barnes & Noble College, will continue to lead the digital education strategy and report to Mr. Huseby, as will the Executive Management team of NOOK Media," a Barnes & Noble statement said. "Mr. Huseby and Mitchell Klipper, Chief Executive Officer of the Barnes & Noble Retail Group, will report directly to Leonard Riggio, Executive Chairman of Barnes & Noble. Allen Lindstrom, Vice President and the Company's Corporate Controller, has been promoted to Chief Financial Officer of Barnes & Noble, Inc. He will report to Mr. Huseby. Kanuj Malhotra, Vice President of Corporate Development, has been promoted to Chief Financial Officer of NOOK Media LLC."
But beyond the weak earnings and what might be an imminent breakup of the chain, there is another reason why Lynch might have had pressure to depart. He had focused much effort on the chain's Nook strategy, having personally rolled out the first Nook back in early 2009. When the chain announced late last month that it was ending its color Nooks, that was widely interpreted as admission of the strategic failure of something that Lynch had become very personally associated with. That said, if the Microsoft purchase of Nook happens and happens at a price decently north of its apparent billion dollar opening bid, that might change the historic view of whether the Nook move was indeed such a failure.
Barnes & Noble Suffers Another Earnings Plunge: Loss More Than Doubles
Barnes & Noble Abandoning Its Color Nooks
Microsoft Considering Dropping $1 Billion To Take Nook Away From Barnes & Noble