By Angela Chen
Barnes & Noble Inc. said Thursday that Nook sales plunged
55% in the holiday season, amid plans by the largest U.S. bookstore
chain to separate its struggling, but profitable, retail businesses
and weak Nook operations.
Overall sales in the Nook segment, which includes the devices
and accessories as well as digital content, fell to $56 million.
Device and accessories sales fell 68% to $28.5 million, while
digital content sales were down 25% to $27.4 million compared with
a year ago.
Barnes & Noble now expects full-year comparable bookstore
sales in its retail core segment to be about flat, instead of
declining in the low-single digits. It backed its full-year outlook
for other segments.
Sales in the company's retail segment, which includes the Barnes
& Noble bookstores and BN.com, ticked up 0.2% to $1.1 billion.
Results were helped by the stabilization of physical book sales and
growth in the educational toys department, which offset declines
from store closures. In addition, numbers were bolstered by
favorable timing of the fiscal nine-week period, which ended on
Jan. 3 this year instead of Dec. 28.
Barnes & Noble has struggled on the digital front, marked by
Nook losses and lacking the marketing muscle to compete with
Amazon.com Inc. or the manufacturing prowess to hold off Apple Inc.
In June, the company announced that it would split into two
companies: one consisting of over 650 consumer stores and
barnesandnoble.com, and the other encompassing about 700 college
bookstores and the Nook digital business.
In December, Barnes & Noble said it would buy out
Microsoft's 16.8% stake in Nook for about $125 million in cash and
common stock. Microsoft in 2012 had agreed to invest $605 million
in Barnes & Noble's Nook digital device and e-book business and
its college bookstore group. The investment included a $300 million
equity stake plus additional investments through 2017. Microsoft is
taking a loss on its investment, but won't have to make any further
financial commitments.
The company split is expected happen at the end of August 2015,
instead of the earlier target of March.
Shares of Barnes & Noble, up about 5% in premarket trading,
are up 61% over the past 12 months through Wednesday's close.
Write to Angela Chen at angela.chen@dowjones.com
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