Barnes & Noble Reports Decline in Nook Sales
The state of Barnes & Noble‘s struggling digital Nook Media business, which last week received a significant investment from Pearson, became more clear on Thursday.
The bookseller said revenue for the Nook unit – including e-readers, digital content and accessories – fell 12.6 percent, to $ 311 million, during the holiday shopping season, compared with the period a year earlier. Digital content sales rose 13.1 percent, while sales of Nook devices declined.
“Nook device sales got off to a good start over the Black Friday period, but then fell short of expectations for the balance of holiday,” William J. Lynch Jr., chief executive of Barnes & Noble, said in a statement. “We are examining the root cause of the December shortfall in sales, and will adjust our strategies accordingly going forward.”
The company said that as result of the sales shortfall, it was forecasting Nook unit revenue of $ 3 billion for the fiscal year and losses “at a comparable level to fiscal year 2012.”
The Nook business has in the past generated talk of acquisition interest or a full spinoff to Barnes & Noble shareholders. And it has attracted some big name investors. Yet the digital business has struggled to compete with Amazon.com, the leader with its Kindle e-readers, as well as with Apple and Google.
Pearson, the big British education company and publisher of The Financial Times, agreed last week to invest $ 89.5 million into Nook Media for a 5 percent stake. It was also granted warrants to buy an additional 5 percent stake.
Pearson’s investment comes after a $ 300 million investment in the Nook by Microsoft in April.
Pearson’s investment valued the Nook business at $ 1.8 billion. That is nearly double Barnes & Noble’s market value of $ 869 million as of Wednesday.