B&N Nook sales drop continues

Nook sales at Barnes & Noble have continued to drop in the first quarter of its new financial year.

The American bookselling chain has reported that Nook sales plummeted by 20.2% year-on-year to $153m (£97.7m) in the first quarter ending 27th July 2013.

While the revenue decline is substantial, it is not as steep as the previous quarter, where sales in B&N’s Nook unit dropped by 34%. At that point, the company announced it would proceed to manufacture tablet devices with a third party going forward, while still continuing to produce black and white and colour e-reading devices independently.

Device and accessory sales suffered the most within the Nook unit, with the company taking in $84m (£53.6m) in the first quarter—a drop of 23.1% in comparison to 2012. The loss can be attributed to “lower unit selling volume” according to B&N.

Digital content sales also dropped by 15.8% year-on-year, which was linked to lower device sales and the boost to 2012 figures given by the popularity of the Hunger Games and the Fifty Shades of Grey trilogies. Stripping out those books, B&N said digital content sales would have dropped by 6.9%. The figure is a slight improvement on the previous quarter, where content sales had decreased by 8.9%. The Nook EBITDA losses totalled $55m (£35.1m).

The company also announced that B&N’s chairman Leonard Riggio has also pulled out of his attempts to buy the retail arm after originally expressing an interest in February. Riggio said: “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.”

Overall B&N’s consolidated revenues dropped 8.5% to $1.3bn (£0.83bn) in the fourth quarter in comparison to a year earlier, while its first quarter EBITDA losses totted up at £8.9m (£12.07), deeper than last year’s $5.8m (£3.7m) loss.

The retail arm of B&N also suffered a 9.9% decrease in revenue to $1.0bn, due to a 9.1% reduction in its store portfolio and lower online sales.  The bookseller’s college arm meanwhile saw revenues increase of 2.4%to $226m (£144.31) in the Back To School season.

The company said its “top priority” was now to increase content sales across all its categories.

Michael Huseby, president of Barnes & Noble and c.e.o. Nook Media, said: “We are working on innovative ways to sell content to our existing customers and are exploring new markets we can serve successfully. The company intends to continue to design and develop cutting-edge Nook black and white and color devices.”