updated 10:35 am EDT, Wed June 25, 2014
Financial results show Nook continues to make a loss for Barnes & Noble
Barnes & Noble is splitting its business in two, separating its book retail business from Nook Media, the company has announced. Two separate public companies will be created, with one set to contain the Nook tablet and e-reader side of the business, and Barnes & Noble hopes to complete all the necessary steps for separation by the end of the first quarter of next year.
Last year, amid poor financial results. Barnes & Noble decided to halt plans for separation. Chief Executive Officer Michael Huseby now claims actions taken in the last financial year have strengthened the company, including the growth of its college business and improvements at retail. "We believe we are now in a better position to begin in earnest those steps necessary to accomplish a separation of Nook Media and Barnes & Noble Retail. We have determined that these businesses will have the best chance of optimizing shareholder value if they are capitalized and operated separately," said Huseby, adding that the board expects both business to have "long-term, successful business relationships with each other after separation."
The fourth quarter earnings for the retailer saw consolidated revenues increase 3.5 percent to $1.3 billion compared to last year, with EBITDA earnings also improving from a loss of $124.6 million to a profit of $11.2 million. Separating from Nook Media will improve the rest of the business, as Nook revenues dropped 22.3 percent year-on-year to $87.1 million, giving the arm an improved EBITDA loss of $56 million compared to a loss of $181.9 million in the same quarter last year.