Bookstore family business considers digital spin-off
Barnes & Noble, the bookstore chain controlled by the Riggio family, plans to spin off its electronic-reader operations in an attempt to help its digital business grow.
The New York City-based family business, which is the second-largest magazine retailer in America, said in a statement that it will “pursue strategic exploratory work to separate the Nook business”.
Nook, the e-reader released in October 2009 by the company, is one of its fastest-growing assets, recording a 70% rise in sales for the nine-week period ending 31 December 2011.
The move to separate Nook comes as losses from Barnes & Noble’s digital business have reduced operating profits for the whole company. The group had net loss of $74 million (€58 million) for fiscal 2011, following profits of around $36 million the year before.
If the spin-off goes ahead, new investors in Nook would help offset some of the rising costs in the digital platform, said the company in the release. No timeline was given, but the group said it was also looking at global partners to accelerate international expansion.
Founded in 1893 as a printing business by Charles, William and Clifford Nobles, Barnes & Noble was sold to Leonard Riggio in the 1970s. Since then it has been under the control of the Riggio family – Leonard serves as chairman while his son Stephen is vice-chairman.
The business had revenues of $7 billion (€5.5 billion) for the fiscal year ending 30 April 2011, with the digital business accounting for around $860 million in sales.
