One of the last holdouts among brick-and-mortar bookstores was dealt a blow Tuesday (Aug. 20) as Barnes & Noble (NYSE:BKS) founder Leonard Riggio announced that he will not be making a bid to buy the retail-store side of the business.
The original idea, which Riggio made public in February, was to buy the retail business and keep the Nook tablet and e-reader business separate. Now, in light of poor quarterly financial results, he's backed off that plan in a Securities and Exchange Commission filing.
"While I reserve the right to pursue an offer in the future, I believe it is in the company's best interests to focus on the business at hand," he said in the filing. "Right now our priority should be to serve the more than 10 million customers who own Nook devices, to concentrate on building our retail business, and to accelerate the sale of Nook products in our stores, and in the marketplace."
Speaking of those Nook products, that side of the business isn't exactly thriving either. The company has said it will discontinue Nook color touchscreen tablets due to their inability to compete, while revenues for that segment were $153 million last quarter, a 20 percent decrease from the same quarter a year ago. Barnes & Noble didn't release a new reader this summer as it has in the past, even though it did drop the price of the backlit model to $99.
The rest of the finances are even more bleak. Barnes & Noble reported losses of $87 million for the last quarter, and while its freefall proved slightly slower than Wall Street had predicted, losing 86 cents per share compared to the 89 that was expected, it's no wonder Riggio isn't eager to bail the retail side out.
The company continues to put faith in the Nook segment, though, which it clearly sees as the future of the company. At least one new Nook device is scheduled for release this holiday season, with others in development. If the new model doesn't take off soon, development might be where those others stay for good.
Barnes & Noble Restates Years' Worth Of Bookkeeping
Is B&N CEO's Resignation Further Proof Of An Imminent Sale?
Barnes & Noble Abandoning Its Color Nooks