B&N’s retail segment, which consists of the Barnes & Noble bookstores and BN.com businesses, saw a decrease of 9.9 percent to $1 billion in revenues for the quarter.
However, the Nook division took a large loss, a drop of 20.2 percent from $192 million to $153 million compared to this time last year. B&N attributes that loss to lower sales on Nook devices than anticipated.
After the last quarter, many reports focused on what seemed like an upcoming split between the retail division and the Nook business. However, that won’t be happening now at B&N. The company announced that Chairman Leonard Riggio has decided to not pursue an offer for the retail side of the business.
In addition, CEO Michael Huseby was adamant that B&N still plans to focus on the Nook division.
“Many people interpreted these comments incorrectly and determined that we were getting out of the device business,” Huseby said in a conference call with investors. “I would like to be clear, we want our consumers to know we will continue to design innovative black and white, and color devices.”
B&N broke down the Nook numbers even further.
Device and accessories sales decreased 23.1 percent to $84 million from a year ago due to lower unit selling volume. In addition, digital content sales were down 15.8 percent to $69 million for the quarter compared to a year ago. Last year, “The Hunger Games” and “Fifty Shades of Grey” trilogies had a major impact on B&N digital content sales. B&N said that excluding the impact of these two titles, digital content sales decreased 6.9 percent.
Huseby said in a call with investors that there are no plans to use retail revenues to fund the Nook portion of the business. It believes the Nook division will remain self-sufficient and will continue to build its own devices.
“In June, there was a strong message sent that we were shifting toward more of a partnership model of color devices,” Huseby said. “We partner now with large tech companies on color devices on a variety of things … the reason I bring that up is there is opportunity to expand our existing relationship. … The problem is not the devices. The device and hardware and software produced over last year are great devices. Some kind of wholesale outsourcing of our color device business is neither appropriate nor is it smart for the company.”
Huseby added: “If we want to be in content business, we have to be in device business.”
• B&N saw growth of 2.4 percent with its college division and continues to view that is a viable market.
• B&N plans to introduce a new Nook device for the holiday season.
• Nook Press has seen an increase of 150 percent from last year, and has added thousands of new titles.
• B&N plans to have a new website launch next year.