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Barnes & Noble founder offers to buy chain’s 689 retail stores and

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Barnes & Noble (s BKS) founder and chairman Leonard Riggio has offered to buy the bookstore chain’s retail side, the company and an SEC filing confirmed Monday. Riggio is the company’s largest shareholder, owning 30 percent of its stock.

Riggio’s offer would take Barnes & Noble’s 689 retail stores and private, and would exclude the college and digital businesses, which Barnes & Noble (s BKS) spun off into a separate entity, Nook Media, last year with investments from Microsoft (s MSFT) and Pearson.

The offer comes at a time when Barnes & Noble’s retail and digital businesses are both struggling. The company is set to report its Q3 2013 earnings on Thursday, February 28, and has warned investors of greater-than-expected losses for Nook. It also plans to close up to a third of its retail stores over the next decade. Separately, New York Times article on Sunday cited a “person familiar with Barnes & Noble’s strategy” who said the company’s poor quarter “has caused executives to realize the company must move away from its program to engineer and build its own devices and focus more on licensing its content to other device makers.”* B&N spokeswoman Mary Ellen Keating said, “To be clear, we have no plans to discontinue our award-winning line of Nook products.”

Barnes & Noble said it’s formed a strategic committee to evaluate Riggio’s offer, with Evercore Partners as financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison as legal advisor. The company said there “can be no assurance that the review of Mr. Riggio’s proposal or the consideration of any transaction will result in a sale of the retail business or in any other transaction. There is no timetable for the Strategic Committee’s review.”

*Also see my ebook predictions for 2013.

2 Responses to “Barnes & Noble founder offers to buy chain’s 689 retail stores and”

  1. I think B&N is finally coming to their senses, they can’t keep losing money in Nook in the name of trying to compete against Amazon. They need to stop looking at Amazon as big bad wolf and a direct competitor. Amazon is so widely diversified even if their market share on books is reduced it won’t kill them. The same is not true with B&N and hence all the negative predictions for years now.

    The biggest problem with Nook as many has pointed out, it lacks identity and branding. In the tech world you can’t compete in hardware if you don’t have deep pockets and brand. Even when you have a brand it still doesn’t mean one can translate a good product to sales. Look at the utter failure of Microsoft Zune?!

    B&N can stand it’s grounds as long as they return to its roots and stay relevant with the communities they serve and continues to provide good customer services in stores. Shopping books online is the same as everything else, for cheap prices and convenience NOT necessarily the best books to read. B&N has long lost it’s branding and they need to find it again. I think they should focus on helping people discover new books or products when they walk into the store. It may sound like a simple thing and it is not.