January 9, 2012

Is B&N beginning its exit strategy?


Late last week saw a swirl of stories about Barnes & Noble that made the company’s stock leap and fall, and leap again. It was all fired by the news that, even as Amazon ramps up its publishing program, B&N has decided to sell its Sterling publishing unit; and by a press release from the company detailing its holiday sales which also mentioned that it has “has decided to pursue strategic exploratory work to separate the NOOK business.”

Spinning off its Nook business may or may not be a good idea—a smart PC World report notes there are very significant pros AND cons. But Wall Street’s first reaction was to bail—stock in the company nose-dived 17% late Thursday and led to stories such as this one, from the Wall Street Journal, headlined: “Investors Are Freaking Out About Barnes & Noble.”

All of which obscured and made sadly ironic what may have been the most telling bit of company news, not-so-hidden in the release linked above—the fact that it had its first retail sales growth in five years.

I’ve predicted  more than once that B&N wants out of the brick-and-mortar retail biz, and was going to get there one way or another soon. The news that, even as the company dedicates less and less floor space to print books, sales went up nonetheless speaks to the moment the way the demise of Borders did—that is, it attests to the fact not that there’s less demand for print books. At B&N, that demand is apparently growing. But what’s going on is another chain retailer—our last—wants to sell something with higher margins.

As a Publishers Weekly report on the tumult notes, “Barnes & Noble could be a very different company one year from now.”

Well, yeah.


Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House.