http://www.forbes.com/sites/jeremygr...nvestors-bite/
Barnes & Noble To Split Into Two Companies But Will Investors Bite?
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If you combine the latter two segments, you get Nook Media, the company B&N hopes to spin off. It had combined revenues of about $2.2 billion and losses of about $103 million last year.
I don’t understand why retail investors would want to own a business that is three-quarters “managing decline” (the college bookstores) and one-quarter money pit (Nook).
So I asked Forrester Research vice president and principal analyst, James McQuivey, Ph.D., who covers the book publishing industry.
He said: “The spinoff of Nook is happening because Barnes & Noble can’t find anyone to sell the division to and so will ‘sell’ it to shareholders. The situation at Barnes & Noble is dire enough that the retail side needs to shed itself of any lingering issues caused by the Nook division’s unclear future. But the fact that no one will buy Nook tells us what will likely happen when the the business is forced to stand alone, it will likely struggle even further.”
Of course B&N retail stores would be better at this point without Nook, but why would any retail investor want to own it?
While those predictions now seem to be coming true, Huseby knows that cutting costs can’t be the company’s only play.
“You can’t cut your way to profitability with a company like Nook,” he said. “You have to grow revenue and do something more radical with it. We will continue to work with outside partners to bring nook to a break even position.”
Should Huseby be able to pull it off, Nook Media might make more sense for retail investors.
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