February 27, 2015

Barnes & Noble creates a new college bookstore business, B&N Education


They'll have to squeeze the word "education" in there, real small

They’ll have to squeeze the word “education” in there, real small

The college bookstore business is still going strong, and Barnes & Noble has found a way to improve its stock by emphasizing its textbooks. In an announcement yesterday, the company said Barnes & Noble Education, an independent and publicly-traded company including 714 stores, is going to be launched by the end of August.

Jeffrey A. Trachtenberg  reports for the Wall Street Journal:

As a separate publicly traded-company, the college group will be aiming to build scale in a highly fragmented market. According to the company’s security filing, there are some 4,500 college and university-affiliated bookstores nationwide that had combined sales of $10.5 billion in 2012.

It’s no coincidence that Amazon just partnered with three colleges, locking in potential Prime members as soon as they leave their parents’ homes. Cold, hard cash wouldn’t hurt, either: B&N expects to make $775 million from this public offering, according to Maggie McGrath at Forbes. Thursday morning, the company’s stock rose to the highest it’s been in a year.

A good thing, too. Barnes & Noble still needs to appease its investors after the disastrous failure of the NookLen Riggio tried to disengage from the line of devices, suggesting that Nook would have to be a separate company from the retail division. When he couldn’t split the businesses, he sold $3.7 million in shares and got out.

The company partnered with Samsung and moved Nook Media to more modest offices in Santa Clara and Mountain View, California. But Nook-related revenue declined by 55% over the holiday season. Just when you thought it couldn’t get worse, it did.

The best part of any reporting about B&N is that the Times or the WSJ will quote a consultant named John Tinker. (We can only hope that his business cards bear some tagline about tinkering with your business plan.)  He says that investors interested in the college market will pay attention to B&N’s new education business.

He explains, “Keeping the Nook inside the retail group is logical because they don’t currently know where it stands. Nook losses are shrinking, but it is still uncertain what is happening there.”

Now it’s up to the Barnes & Noble retail division to hold up the Nook business. At least, until they figure out where they can discreetly dispose of it. Time to bury the devices in the desert, perhaps?


Kirsten Reach is an editor at Melville House.