Quote:
Originally Posted by fjtorres
Or that the top management has identified necessary steps that would risk their control if they were undertaken by a publicly-traded company so they are looking to take it private, restructure, and then go public again later.
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Taking the company private, or broadening the shareholder base, isn't the decision of management -- it's the decision of the shareholders and board of directors. In B&N's case, the founder is the chief (minority) shareholder.
B&N is a complex puzzle: Leonard Riggio is founding shareholder; Ron Burkle holds 19% of the company and has recently been suing the company (and the board) because it enacted policies making it expensive for Burkle to acquire a larger share. Stephen Riggio, Leonard's brother, was forced to resign as CEO in March partly because of Burkle's activism and the continuing poor performance of the stock.
Going private may be a very good thing, provided they have continued access to enough capital to re-invent themselves. They have about 1500 stores (I previously stated 2000 in error) and a very deep connection into college book distribution -- a unique niche market. Nor is it necessary to slash staff and stores ... the public has hardly abandoned buying physical books. B&N's problem is less that it isn't making money but that it isn't making enough. That's execution, from warehouse to check-out, and a solvable dilemma. But it might take the merchandising skills of a Sam Walton, as opposed to someone living in St Mary Mead's, to drive those profits.