Founder Leonard Riggio won’t buy website and stores. Shares fell 12 percent.
NEW YORK – Barnes
Riggio, 72, who is also Barnes & Noble’s chairman and largest shareholder, said in a filing Tuesday he would drop the plan he floated in February to buy its website and almost 680 stores. The shares plunged, erasing their gain for the year, as the company also reported a fiscal first-quarter loss that was bigger than analysts estimated.
Sales at the Nook unit, once the company’s grand hope for navigating from printed to digital books, declined 20 percent in a third straight drop. Instead of moving toward a breakup, Barnes & Noble now will focus on better integrating its retail, college, and Nook units, President Michael Huseby said in an interview.
“They are stuck between a rock and a hard place,” said Michael Souers, an analyst for Standard & Poor’s in New York. “If the company could get rid of the Nook business and its losses, it would become profitable again, but over the long term e-books will continue to garner market share from printed books. Longer term, that’s a losing business.”
The stock Tuesday tumbled 12 percent to $14.61 at the close, for the lowest price since Feb. 22. Barnes & Noble erased all its gains for the year and finished the session down 3.2 percent for 2013, while the Standard & Poor’s 500 added 16 percent.
“Riggio pulling his intent to purchase the retail stores is a big hit to the share price,” said Souers. Even so, a further decline could bring back Riggio or convince a private equity fund to make a bid, he said.