Popular bookstore Barnes and Noble closed this holiday season with a reported 26 percent drop in sales in its Nook business. The company unveiled its the new Nook HD and Nook HD+ tablets this holiday season but still sold fewer e-readers. Despite the loss, Barnes and Noble Chief Executive William Lynch said the company remains committed to the Nook devices.
Digital content sales increased seven percent even as sales of devices dropped. This may be the result of contented Nook users buying content on their current Nook devices rather than upgrading to the latest models. Device sales have been hampered by the sales of competing tablets from Apple and Google on which consumers can still read Nook content. Barnes and Noble’s Nook devices have also failed to break the stranglehold Amazon continues to have with its Kindle line of products.
Last year Barnes and Noble grouped the Nook and college bookstore businesses into a unit called Nook Media, which drew investment from both Microsoft and Pearson. This arm of the company has around $240 million in cash and finances itself, rather than pulling from the brick-and-mortar side of the company. The Nook business still managed to bring in $316 million in revenue this past quarter and continues to be the more profitable side of the company.
Barnes and Noble Chairman Leonard Riggio is seeking to buy Barnes and Noble’s 689 retail stores in order to protect them from a rocky future. The retailer has expressed plans to close 15 unprofitable stores a year. Riggio is not interested in taking over Barnes and Noble’s 674 college bookstores nor is he interested in the company’s e-book business, considered by investors to be the more valuable side of the company.
Barnes and Noble is the largest book retailer in the US. The company has struggled to compete as consumers have increasingly transitioned over to reading digital media. The future of Barnes and Noble’s Nook remains as uncertain as the future of the company itself.