As Barnes & Noble’s board reviews a bid from Liberty Media to acquire the company, it still has to focus on the here-and-now of running a business with physical and digital components. On the digital side, the news is good. Today B&N reported a sharp rise in sales on BN.com (NYSE: BKS) and rapid growth of the Nook e-reader, e-books and other Nook-related products.
In a conference call following the earnings report released this morning, B&N CEO William Lynch said that the Nook’s market share has increased to 26 or 27 percent, up a bit from the 25 percent that the company reported in February. (Amazon’s Kindle is believed to hold 60 to 65 percent of the market.) Overall, Lynch said, Nook-related business grew to over $250 million in the fiscal year ending April 30-close to 300 percent growth over the same period last year.
“We now sell three times as many digital books as all formats of physical books combined on BN.com,” Lynch reported. (Amazon (NSDQ: AMZN) is also selling more e-books than print books, but neither company has released actual sales numbers.) He also said that “PubIt!, our self-publishing digital platform, is the fastest growing part of our digital catalog in units and volume sales. We had our first PubIt! title reach #1 sales rank on our Nook Bookstore recently.”
Overall sales at BN.com increased by 65 percent, to $858 million, for the fiscal year.
But digital sales couldn’t make up for the fact that in-store sales were down, about 3 percent for the quarter. The company attributed that to the liquidation of over 200 Borders stores during the period; it lost walk-in business when Borders slashed prices. B&N’s total fourth-quarter loss was $59 million, higher than had been projected. Standard & Poor analyst Michael Souers told Bloomberg that the company had to increase its spending on marketing and product development to stay competitive with the Amazon Kindle. He called the Nook B&N’s “only driver of long-term growth.”
Because Barnes & Noble’s board is in the process of reviewing Liberty Media’s bid, the company said it wouldn’t issue sales or earning guidance on its outlook for 2012.