Barnes & Noble (NYSE: BKS) said it would seek strategic options for its NOOK e-reader business. The news sent shares down 20% in the pre-market to $10.69. It may be that investors believe that without the NOOK there is very little value left in the BKS brick and mortar stores. Rival Borders went out of business last year.
There should also be concerns that the NOOK runs a distanct second to the Amazon.com (NASDAQ: AMZN) Kindle which dominates the e-reader market. The Apple (NASDAQ: AAPL) iPad is also considered competition.
BKS said
The Company also said that it is in discussions with strategic partners including publishers, retailers, and technology companies in international markets that may lead to expansion of the NOOK business abroad.
There can be no assurance that the review of a potential separation of the NOOK digital business will result in a separation. There is no timetable for the review, and the Company does not intend to comment further regarding the review, unless and until a decision is made.
BKS also disclosed financial results:
During the nine-week holiday period, Barnes & Noble store (or “Retail”) sales increased 2.5% over the prior year period to $1.2 billion. Comparable store sales increased 3.4%, on top of a 9.7% increase last year. Retail core comparable store sales, defined as the sales of non-digital merchandise, increased 4.5% over last year.
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