From The Wall Street Journal:

Barnes & Noble Inc. said it would pursue a split of its retail and Nook e-reader businesses into two separate public companies.

The bookseller said it plans to complete the separation by the end of the first quarter of the next calendar year.

Shares jumped about 7% in recent premarket trading.

. . . .

For the latest quarter, the Nook segment posted a 22% revenue decline to $87 million, the company said on Wednesday. Digital content sales fell 19% to $62 million.

Barnes & Noble’s retail segment, meanwhile, posted a 0.8% increase in revenue to $955.6 million as the latest quarter included an extra week. However, same-store sales, excluding Nook items, fell 1.9%. The company pointed to “unusually severe February weather,” as one reason for the decline. Including Nook items, same-store sales fell 4.1%.

“We believe we are now in a better position to begin in earnest those steps necessary to accomplish a separation of NOOK Media and Barnes & Noble Retail,” said Chief Executive Michael P. Huseby. “We have determined that these businesses will have the best chance of optimizing shareholder value if they are capitalized and operated separately.”

. . . .

The company in August abandoned any plans to split up the company after considering the idea for 18 months.

Link to the rest at The Wall Street Journal (Link may expire)

PG says spending 18 months unsuccessfully trying to split Nook from the bookstores, then deciding to stay together then deciding again to split up doesn’t portend a sunny future for Barnes & Noble.

PG suspects that Nook has already suffered a significant brain drain. This news will send even more talented employees out the door.

From Digital Book World:

Barnes & Noble’s Nook digital device and content platform is now doing business in 32 countries and 14 languages and, despite turmoil on the balance sheet for the company, the executives leading its international expansion are optimistic about the future of their efforts.

. . . .

“This is the very tip of our international expansion,” Nook Press general manager Theresa Horner told Digital Book World at the London Book Fair. Nook Press is the self-publishing arm of Nook.

Horner pointed to countries like India, Singapore and Spanish-language markets as places where there wasn’t yet much digital content or ebook purchasing activity but were promising targets for expansion.

. . . .

While the company wouldn’t share device and ebook units, Eustace said that “we’re really happy with the numbers we did in 2013.”

He called the content sales a “slow build” that would grow as more devices made it onto the market.

. . . .

Nook has also been partnering with Micosoft on distributing its apps through the Windows 8 platform.

Link to the rest at Digital Book World

PG is a bit skeptical.

In the US, Nook’s biggest competitive advantage vs. other ereaders was the prominent placement of Nook kiosks in Barnes & Noble stores and physical access to Barnes & Noble’s customers streaming by. Without that advantage overseas, exactly why would anyone choose Nook over Kobo or Amazon?

The Nook Store is still behind the state of the art and, while Nooks were always decent hardware, they don’t have either killer technical advantages or meaningful exclusive content compared to competitors.

Why does a Nook generate a second glance from someone who has never heard of Barnes & Noble?

From Digital Book World:

Over the past month, I’ve spoken to over a dozen large, medium and small publishers of ebooks and a handful of important ebook distributors which cater to indie authors. Many of them have shared with me their ebook retailer market share breakdown for the past three months (December, January and February). At the same time, due to the sensitivity of the matter (no publisher wants to publicly acknowledge what percentage of revenue comes from Amazon, for instance), many publishers officially declined to share data with me.

. . . .

Among the largest publishers, Barnes & Noble seems to still be solidly No. 2 behind Amazon, but both Apple and Amazon are gaining market share and B&N is losing it.

. . . .

One surprise in looking at large publishers is that Google kept on coming up as a retailer that is gaining market share.

. . . .

Among medium-sized publishers, Apple and Barnes & Noble are closer.

Among the medium-sized publishers I spoke with, some are making more money with Apple, and some with B&N. I was told that month-to-month, genre-to-genre and book-to-book it changes.

Among small publishers, Apple seems to have taken the market share lead.

I was told by small publishers that Apple has become very attentive to their needs while the opposite has happened at Barnes & Noble. Apple’s efforts, they told me, have paid off.

At a small publisher, one book can make a huge difference in retailer market-share over the course of a month. I was told several stories of how clever marketing by Apple for titles with momentum resulted in huge market-share swings in Apple’s direction over the course of a month or two. I was even told by one small publisher that for one book, Apple far eclipsed Amazon in sales.

Among indie authors, Barnes & Noble is likely the leader still, but it’s unclear.

One major distributor had Barnes & Noble in the lead, but not by much and with the margin shrinking. Another said Apple was far ahead.

“Apple is our No. 2 ebook retailer over the past year – and a strong No. 2,” said Matt Cavnar, co-founder of Vook, which distributes about 5,000 ebooks for authors, small- and medium-sized publishers and its own publishing operations.

. . . .

Among all categories, Amazon seems to be gaining market share.

Among all the groups we spoke with, the overall narrative seemed to be that Amazon and Apple were gaining market share and that Barnes & Noble was losing it.

The going thinking right now is that the shift away from agency pricing by the largest publishers has helped Amazon grow its ebook market share because it’s doing the most discounting. I don’t think that’s quite right. Amazon’s competitors are discounting, too.

What I think has happened is that because Nook, for instance, is now selling many, many titles without making a profit (or at a loss — I’m talking about best-selling titles from the publishers which were previously agency), the bleeding of 2011 and 2012, when the company was losing hundreds of millions of dollars a year, has turned to a full-on hemorrhage.

Link to the rest at Digital Book World

From The Bookseller:

Nook is set to launch its self-publishing platform Nook Press in the UK at the Oxford Literary Festival this weekend (22nd March).

The digital arm of the American bookseller Barnes & Noble is providing the festival marquee along with Blackwell’s Oxford bookshop, which will feature a “Nook Experiential Area” where Nook booksellers will be on hand to discuss the company’s products.

. . . .

Colin Eustace, general manager of Barnes & Noble, S.A.R.L said: “Nook is proud to partner with Blackwell’s to support the Oxford Literary Festival as part of our continued commitment to promoting literacy in the UK. Both Blackwell’s and Nook have unmatched experience in bookselling and have formed a strong partnership focused on delivering the best books and content to UK customers. As Nook continues to grow in the UK we are proud to announce the upcoming launch of the Nook Press self-publishing platform and we invite authors and writers at the Oxford Literary Festival to speak to a representative for more information.”

Link to the rest at The Bookseller

From Publishers Weekly:

Barnes & Noble’s filing with the SEC for the third quarter of fiscal 2014 shows how dramatically the company is scaling back its Nook operations. During the period ended January 25, 2014, Nook capital expenditures were $7.4 million, a decline of 74% from the money spent on the group in the comparable period in fiscal 2013. For the first nine months of fiscal 2014, Nook capital expenditures were reduced 55%. The filing repeated what company executives said in the conference call last week that since making the decision to further downsize Nook on February 3, they have cut 75 jobs (190 jobs have been eliminated in all at Nook in the fiscal year).

While it is cutting investment in Nook, B&N is upping resources in the retail trade stores.

. . . .

B&N operated 663 retail trade stores at the end of January and said in the filing that while it may open some new stores in the future it expects to see a net reduction in the number of outlets.

. . . .

B&N’s investment is following where customers are spending money. Sales of “media”—physical books, movies, music, and magazines—fell 6% in the quarter but accounted for 67% of sales, up from 64% in the third quarter of fiscal 2013. Sales of other products, which includes B&N’s growing toys and games business plus café and college apparel, had a 3% sales increase and accounted form 24% of sales, up from 21%. Sales of digital products—hardware, accessories and “econtent”–fell 46% and comprised 9% of revenue in the most recent quarter, down from 15%.

The filing also noted that B&N continues to work toward selling e-books in 10 international markets, as mandated in its deal with Microsoft. While B&N has launched the Nook app for Windows 8.1 in 32 countries, B&N acknowledged that effort has not reached the “content thresholds” called for by the Microsoft contract.

Link to the rest at Publishers Weekly

From Publishers Weekly:

The release of its third-quarter results for fiscal 2014 and the subsequent conference call with analysts on February 26 made it clearer than ever that Barnes & Noble executives are operating two companies with very different issues. Of B&N’s two most important groups, the retail trade stores remained profitable in the quarter ended Jan. 25, 2014, although both sales, down 6.3%, and EBITDA, down 7.5%, fell. Sales also fell in the Nook division, dropping 50.4%, but the group did manage to cut its net loss by 67.5%.

. . . .

Just as former B&N CEO William Lynch once did, new CEO Mike Huseby told analysts that B&N’s future lies in the sale of digital content and that improving content revenue is currently B&N’s “toughest challenge.” In the third quarter, digital content sales dropped 26.5%. Part of the strategy to turn around the slide in content sales, Huseby said, is to find companies that are willing to put B&N’s “content catalogue” of about three million e-books plus magazines and newspapers on their platforms. B&N is also talking to technology companies about teaming with B&N to develop new devices, and Huseby said he expects the company to release one Nook Color tablet from such a partnership this fall. Huseby said B&N is aware that to have a successful digital content business, the company needs to maintain an e-reader presence.

Link to the rest at Publishers Weekly

From The New York Times:

Barnes & Noble said on Wednesday that it would release a new color tablet later this year, even as losses in its sputtering Nook division continued to weigh down the bookseller in its most recent quarter.

The nation’s largest bookstore chain, with 663 stores, said it was “in discussions” with outside hardware companies to produce the new tablet, a sign that Barnes & Noble was rapidly moving away from the production of its own Nook devices. The company did not introduce a new device in 2013.

. . . .

Michael P. Huseby, the chief executive, described the current status of the Nook division, once viewed as the centerpiece of the company’s growth strategy, as “in a rebuilding period.”

In an interview, Mr. Huseby said that while the division in the last several years had focused on making e-readers to promote the sales of e-books, it had pulled back on those efforts. The current emphasis is on increasing content sales, hopefully by forming partnerships with other companies, he said.

“We’re really focusing on, How do we leverage relationships with others?” he said. “We want to retool the company and stop content revenues from declining.”

. . . .

 Mr. Huseby said executives believed that the company currently held about 20 percent of the e-book market, according to their conversations with major publishers. That would be a decline from two years ago when it was believed to be 25 to 27 percent.

Link to the rest at The New York Times

From Good EReader:

Barnes and Noble is a company in transition, when it comes to their floundering Nook Media division. In the last two months they have announced the departures of Jim Hilt – Vice President of eBooks, digital products director Jamie Iannone and VP of digital products Bill Saperstein. A myriad of other people have left, including the head of accessories and most of the hardware developers. The big reason these executives have left is primarily due to the fact that Nook Media has lost over a billion dollars since 2010.

Barnes and Noble is quite transparent when it comes to their financial earnings and hold nothing back from investor calls and their reporting. Normally, their end of the year reports come out every April and there is some bleak news. In 2011 the company lost 209 million, in 2012 they lost 261 million and in 2013 they increased the losses to 475 million. If we look at the quarter ending on July 27, 2013 they reported loses of 55 million and October 26, 2013 NOOK lost 45 million. If you add all of these figures together it comes to over 1 billion dollars.

Link to the rest at Good EReader and thanks to Mike for the tip.

From The Digital Reader:

Don’t look now, but Barnes & Noble has retired the Nook Touch. This ebook reader, which initially launched in 2011, is no longer mentioned on the B&N website, and according to my sources all mentions of it are being removed from B&N stores today.

. . . .

This model was priced to compete with the basic Kindle, and now that it’s gone B&N won’t have an ebook reader for the budget conscious consumer. Sure, there are any number of models on the market which will work with the Nook Store, but I was under the impression that one goal for the Nook hardware was to try to lock readers in to buying their ebooks from B&N.

Link to the rest at The Digital Reader

From Business Insider:

Barnes & Noble laid off its Nook hardware engineers, according to a source that tipped Business Insider.

The engineers were let go last Thursday, according to our source. This follows Barnes & Noble dismissing the VP of Hardware, Bill Saperstein in January.

Barnes & Noble confirmed that it laid people off when we asked. A spokesperson told us:

“We’ve been very clear about our focus on rationalizing the NOOK business and positioning it for future success and value creation. As we’ve aligned NOOK’s cost structure with business realities, staffing levels in certain areas of our organization have changed, leading to some job eliminations. We’re not going to comment specifically on those eliminations.”

. . . .

While it’s shedding staff, a spokesperson said Barnes & Noble remains committed to the Nook group.

Link to the rest at Business Insider and thanks to Matthew for the tip.