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Old 06-19-2012, 12:35 PM   #7
SensualPoet
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Join Date: Nov 2009
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Device: Kobo Glo, Kobo Aura HD, Kindle Wifi, Nexus 7 (2013), Samsung Tab 10.1
For B&N's Q4 2011 vs Q4 2012 (ending Apr 28) there was a majo differnce: although it operates 600+ reail stores, it was staring down a competitor (Borders) that at the time had 400+ stores. Since last summer, Borders has disappeared. You would think that previous Borders customers would give SOME lift to sales for Barnes and Noble. But, you'd be wrong. The comapny generated 0.4% (less one one-half of one percent) higher sales, year over year.

Nook division sales were DOWN to $164 million from $183 million. Of the $164 million, only $1 million represented "gross profit" and it cost them $78 million to sell that stuff ... for a net loss of $77 million. Nook division incorporates hardware and content sales related to Nook. This division is a huge sinkhole. And it is supposed to be the engine of growth that Microsoft wants a piece of.

It is not hard to understand why Liberty Media back away from buying the comapny last year, opting for a $200 million preferred share investment. Those shares can be converted to voting shares at $17 each (ie abt 11.7 million shares). The stock is currently trading at $14.30 so that's a pretty rotten deal.

Plus management apparently refused to give guidance for 2013. While some folks think B&N will be saved by embarking on an international investment program, it seems they really need to figure out how to make money at home first and build upon what, on paper, look like pretty good assets: good share of US ebook sales, the leading retail chain for paper books, a captive college audience on campuses, a celebrated eink and ereader tablet competitively priced ... but every quarter they can't seem to make the numbers work. This can't go on forever, even with angel investments from Liberty and Microsoft.
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