Barnes & Noble's Shares Plummet After Loss Widens by Another $10 Million
Barnes & Noble shares closed down 11.8 percent Thursday at $6.88 after its loss widened to $30 million for fiscal Q2 from $20 million in the year-ago quarter. Overall sales slid to $791 million from $858 million, and Nook division…
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revenue plummeted to $25.9 million vs. $35 million a year ago, said the company in an SEC filing. It made a heavy push into non-book categories including toys and games in recent quarters to try to prop up sales, but CEO Demos Parneros said the company is now focusing more on its roots. "Book sales continued to strengthen, and we saw improved traffic and conversion trends,” he said: B&N will “continue to place a greater emphasis on books, while further narrowing our nonbook assortment.” Mix shift along with cost reductions will help B&N reach EBITDA of $180 million in the holiday quarter, he said. The filing attributed declining trends to “lower store traffic and the challenging retail environment.” BN.com and Nook are “important components” of the company’s retail strategy, and it believes long-term improvements to the BN.com platform will make it more competitive. The company continues to “judiciously bring” new Nook devices and apps to market, it said. The estimated life of a Nook e-reader is two years, said the company. B&N had 632 retail stores at the end of October, six fewer than in the year-ago quarter. In November, B&N responded to a Wall Street Journal article on a Sandell Asset Management proposal to take the retailer private for $650 million. The proposal would require $500 million in debt financing and require shareholders, including Chairman Leonard Riggio, who owns 18 percent, to roll their shares into a new private entity controlled by Sandell. Riggio had "no intention" of rolling his shares, and the company said a $500 million debt financing was "highly unlikely."