NEW YORK (
Barnes & Noble
(BKS - Get Report)
founder and lead shareholder Leonard Riggio on Tuesday, Aug. 20, suspended his effort to acquire the company's retail operations, saying the struggling bookseller needs to instead focus on its business.
Riggio in a February regulatory filing expressed a desire to negotiate a cash purchase of the company's physical locations, excluding its college outlets. The investor, who remains the company's chairman, opened his first bookstore in New York's Greenwich Village in 1965, and still holds a 29.8% stake in the company.
"While I reserve the right to pursue an offer in the future, I believe it is in the company's best interests to focus on the business at hand," Riggio wrote in an amended filing Tuesday. "Right now our priority should be to serve the more than 10 million customers who own Nook devices, to concentrate on building our retail business, and to accelerate the sale of [Nook] products in our stores, and in the marketplace."
The announcement comes as New York-based Barnes & Noble reported fiscal first-quarter sales of $1.3 billion, down 8.5% from a year prior, and an Ebitda loss of $8.9 million. Sales gains in the company's college unit were unable to offset declines in its retail and Nook operations.
During the quarter, the retail operation was the only part of Barnes & Noble that was profitable, though the company attributed the college unit's $19 million Ebitda loss to new store expenses and investments in digital education. Barnes & Noble ended the quarter with $73 million in net cash.
Company CEO Michael P. Huseby said Barnes & Noble is focused on growing revenue across all categories.
"We are working on innovative ways to sell content to our existing customers and are exploring new markets we can serve successfully," Huseby said, adding that Barnes & Noble "intends to continue to design and develop cutting-edge Nook black-and-white and color devices."
Barnes & Noble operates 674 bookstores in 50 states and a large e-commerce site. Its college unit operates 692 bookstores serving more than 4.6 million students and faculty members.
--Written by Lou Whiteman