Barnes & Noble does business by the book and the NOOK. As the #1 bookstore chain in the US, it operates about 1,360 bookstores, including some 675 Barnes & Noble superstores and another 685 college bookstores, in all 50 states and Washington, DC. Stores range in size from 3,000 sq. ft. to 60,000 sq. ft. and stock between 60,000 and 200,000 book titles. It also sells books and other media online. The company's digital subsidiary, NOOK Media, develops, supports, and creates digital content and products for the digital reading and digital education markets. Heavy losses at its NOOK business led Barnes & Noble to quit making color NOOKs and consider strategic alternatives for its digital business.
Despite its intensive and expensive push into the digital arena, Barnes & Noble still relies on its retail bookstores for nearly two-thirds of its sales. Barnes & Noble College Booksellers, the company's growing college division, accounts for 25% of sales and operates about 685 bookstores at colleges and universities across the US that sell and rent new and used textbooks, including e-textbooks and course-related materials. The NOOK business, launched in 2009, accounts for just over 10% of sales. Amid sliding sales and steep losses at NOOK Media, in 2013 Barnes & Noble said it will quit making color NOOK tablets, although it will continue to make black-and-white e-readers.
Barnes & Noble's sales declined by 4% in fiscal 2013 (ended April) versus the prior year and the company lost nearly $158 million (its third consecutive year of unprofitability). Net cash inflow decreased by $5 million over the same period. The sales slide reversed a three year trend of increasing sales for the bookseller. Both the company's retail and NOOK segments posted sales declines in fiscal 2013 with sales at the retail division down nearly 6% due to a decrease in same-store sales, lower online sales, and a reduction in the number of bookstores in operation. The NOOK unit's sales declined by 16%, while the college division posted a modest 1% uptick in annual sales.
Barnes & Noble's ambitious attempt to compete with Amazon.com (the maker of the market leading Kindle e-reader), Apple, and Google in the e-reader and tablet markets, ended in July 2013 with the resignation of William Lynch, the company's CEO and architect of its digital strategy, and the announcement that the company will stop making color NOOK devices. While the NOOK business initially looked to be a big success, growing to capture about a quarter of the e-book market, it was capital intensive and led the steep losses by the company. By reducing its dependence on the NOOK, which was the company's growth engine, Barnes & Noble appears to be returning to its roots as a bookstore operator, although one with far fewer bookstores. Indeed, the company says it expects to have just 450 to 500 stores by 2023 (down from about 675 in 2013).
Despite putting the company up for sale back in 2010, Barnes & Noble has yet to find a buyer. The lengthy search for a suitor by the #1 US bookstore chain reflects the uncertain outlook for bookstores.
Company founder and chairman Leonard Riggio owns 30% of Barnes & Noble's shares. The company put itself up for sale in mid-2010 but has yet to find a buyer. An approach by media conglomerate Liberty Media in 2011, resulted in an investment of $204 million, rather than a sale. As a result, Liberty Media owns roughly 16% of Barnes & Noble and received two seats on the bookseller's board.