Shareholders grill B&N on Nook strategy

Shareholders grill B&N on Nook strategy

A major Barnes & Noble shareholder has told the company that “no-one is happy with Nook” and a new e-reader strategy is needed.

B&N chair Len Riggio faced persistent questions on the future of the company and the Nook division in particular, at an investors meeting held earlier this week.

According to Publisher Weekly, Gregory Maffei, c.e.o. of Liberty Media, which owns 17% of B&N, said: “Look, no-one is happy with Nook, we know we need a new e-reader strategy but it’s not easy when you look at [the competitors] we’re up against.” He added: “Its not like Liberty Media is against split-offs but it would be difficult to do at this time.”

Another shareholder asked the B&N board why it did not not sell off the Nook Media unit, to which Riggio admitted, “Everything is on the table; we’re looking at all the doors. How we proceed depends on the opportunities we encounter. Some of you tell me you want a dividend, or a special dividend; others say sell one of the companies or others say split up the company. There are a lot of possibilities and not all of them mesh.”

The board blamed “overly optimistic” projections of past Nook Christmas sales for the Nook unit’s losses but reiterated that “our losses are coming down.” Riggio added: “Our biggest competitor has regularly reported losses for the last 10 years.”

However, the Nook Media c.e.o. Michael Huseby said the company wasn’t going to “cut our way to profitability” and had to boost content sales. He said: “If we don’t, we’ll look at alternatives. We’ve got to grow content sales and there will be no sale or split off of B&N and Nook.”

Last month, B&N revealed that Nook sales plummeted
by 20.2% year-on-year to $153m (£97.7m) in the first quarter ending 27th July 2013.

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.