Despite industry predictions and an earlier plan by B&N
chair Len Riggio that he would buy the retail business, B&N executives
backed off from plans to separate the B&N retail and Nook Media business
units. In a conference call following the release of B&N’s fiscal 2014
first quarter results, B&N executives cited the importance of device
production to content providers, once again pointed to the advantages of its
physical stores in conjunction with digital distribution and outlined new
strategies to address mounting Nook Media losses. While Riggio announced that
he was suspending efforts to buy the retail business, he also made it clear
that “I reserve the right to pursue an offer in the future," so the issue
may be revisited. B&N president and Nook Media CEO Michael Huseby, CEO of
B&N retail Mitch Klipper and other executives were on hand to address
questions about the shift in strategy, including concern from some investors on
the call that Nook Media is masking the value of B&N retail; and that
B&N retail is financing the mounting losses in the Nook Media unit. Huseby
said the sale to Riggio has been halted and executives were reviewing the
strategy. Huseby emphasized that “despite the Nook losses,” B&N’s overall
position was “strong” and the company ended the first quarter with a net cash
position of $73 million.
