Barnes & Noble reports decline in retail store and NOOK sales, will suspend effort to spin off retail business
The brick and mortar bookstore chain Barnes & Noble today reported Q1 earnings. The bookseller said its revenue fell 8.5 percent, while the company reported a net income loss of $8.9 million. Both reflected declining results versus last year.
B&N is in its 2014 financial year already and things have not started out well, though it must be said that today’s earnings report really reflects what the company’s strategy has been under the former leadership of William Lynch Jr. who resigned last month.
Retail sales fell almost 10 percent in the quarter while NOOK sales tanked, down over 20 percent. Same store sales were down 9.1 percent as the chain closed a number of stores last quarter.
Like Scholastic, the chain put some of the blame on declining sales due to comparisons over the year before when The Hunger Games and Fifty Shades of Grey were bestsellers. B&N put the decline in same store sales at only 2.9 percent if those books were taken out of the picture.
The NOOK remains a drag on performance, as well. B&N puts losses due to the tablet at $55 million in quarter, the same as the year before. Selling inexpensive eReaders without a corresponding increase in online sales is proving to be a deadly combination. Despite this, the company said it will release a new NOOK this year.
“The company intends to continue to design and develop cutting-edge NOOK black and white and color devices. We will continue to offer our award-winning line of NOOK products including NOOK Simple Touch®, NOOK Simple Touch® with Glow Light®, NOOK® HD and NOOK® HD+ at the best values in the marketplace. At least one new NOOK device will be released for the coming holiday season and further products are in development. All NOOK devices will continue to be backed by world-class pre- and post-sales support in Barnes & Noble stores, as well as ongoing software upgrades and improvements to the digital bookstore service,” said said Michael P. Huseby, President of Barnes & Noble, Inc. and CEO of NOOK Media.
Plans to separate out the NOOK business from the retail business have been shelved for now, said B&N”s chairman, Leonard Riggio.
“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. 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,” Riggio said in the earnings press statement.