This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Barnes & Noble to Spin off Nook Business

Stocks in this article: BKS AMZN

NEW YORK (The Deal) -- Barnes & Noble (BKS) said Wednesday it intends to split its Nook business from its retail operations, continuing a long-running revamp of the book retailer. 

New York-based Barnes & Noble said that its board has authorized management to split off Nook Media, which includes its devices, digital content and college bookstore businesses, as a separate public company. The separation is expected to be completed by the end of the first quarter of 2015.

Barnes & Noble operates 651 retail locations in 50 states as well as an e-commerce site, while the Nook business includes a digital reader, retailer and about 700 bookstores serving than five million university students. The company has been attempting to reinvent itself in reaction to a competitive onslaught by Amazon.com  (AMZN - Get Report) and other digital sellers.

The company also on Wednesday reported Ebitda of $11.2 million for the quarter ending May 3, significantly higher than the Ebitda loss of $124.6 million recorded during the same three months a year prior. Sales grew 3% year-over-year to $1.32 billion.

Barnes & Noble said its retail segment, which includes the bookstores and its bn.com business, generated Ebitda of $354 million on sales of $4.3 billion in the last 12 months. The college segment reported Ebitda of $115 million on $1.7 billion in sales, and Nook had an Ebitda loss of $218 million on revenue of $506 million. 

Barnes & Noble CEO Michael P. Huseby in a statement said that the company's work in recent years streamlining its operations has prepared it for a split.

"We have determined that these businesses will have the best chance of optimizing shareholder value if they are capitalized and operated separately," Huseby said. "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."

The company is working with Guggenheim Securities and Cravath, Swaine & Moore on the split.

The split comes less than a year after company founder and lead shareholder Leonard Riggio abandoned efforts to force a breakup, dropping a bid to acquire the company's retail operations. Later in the year CEO William Lynch, a strong advocate of the Nook operation, resigned, replaced by CFO Huseby as CEO in January.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,416.85 +225.48 1.31%
S&P 500 2,021.25 +19.09 0.95%
NASDAQ 4,683.4070 +45.4130 0.98%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs