22 Aug 2013 01:13:34
Barnes & Noble Inc's founder pulled the plug on his plan to buy the company's bookstores as the chain posted a deeper quarterly loss amid plunging sales of its Nook device and e-books and declining business at its stores.
Shares of the largest US bookstore chain fell 14% to $14.35 in premarket trading on Tuesday, even as the quarterly results came in slightly ahead of Wall Street expectations.
Leonard Riggio, the company's chairman, founder and top shareholder, said he has suspended his efforts to make an offer for B&N's retail business but reserves the right to pursue an offer in the future.
Riggio, in a statement, said he believes "it is in the company's best interests to focus on the business at hand".
The latest quarter was a tumultuous one for B&N. CEO William Lynch resigned on 8 July, soon after the company announced a 34% revenue drop in its Nook digital business, a venture he spearheaded that has cost the company hundreds of millions of dollars.
B&N said in June it would no longer make tablets unless it found a partner. It began shopping the Nook business about a year and half ago, with a view to selling it or spinning it off. Last year it attracted investments from Microsoft Corp and Pearson Plc Earlier this month the chain slashed prices on its Simple Touch e-readers, suggesting demand in that part of the Nook business was tepid.
B&N said on Tuesday that it plans to release at least one new Nook device for the upcoming holiday season and that further products are in development.
The company reported a net loss of $87m, or $1.56 per share, for the fiscal first quarter ended 27 July, compared with a loss of $39.8m, or 76 cents per share, a year earlier.
An adjusted loss of 86 cents per share, which excludes a valuation allowance against certain deferred tax assets, was narrower than the loss of 89 cents per share expected by analysts, according to Thomson Reuters I/B/E/S.
Revenue fell 8.5% to $1.33bn, slightly better than the $1.32bn analysts had expected.
Revenue from the Nook business, including e-books and devices, fell 20.2% to $153m. At its namesake bookstores, sales at stores open at least 15 months fell 9.1%.
B&N said it still expects retail comparable-store sales to be down by a high single digit percentage in the current fiscal year.
