I spent several hours on Friday setting up my old Nook for my mother to use. She’s always been a voracious reader and just recently decided she wanted to try an e-reader. She’s like me in that sometimes technology eludes her, so she didn’t want to buy a new one, only to find out she couldn’t remember how to operate it. I had the Nook, my first e-reader, in a drawer, so we started an account at Barnes and Noble and downloaded eight mysteries for ninety-nine cents each. She was thrilled, and as I left her house Saturday at noon, she was happily immersed in one of her new books.
Today as I was reading an online blog, this article jumped out at me. It states Barnes and Noble’s revenue for the third quarter decreased by 8.8 % over the same period last year. While their nearly 700 brick & mortar stores and 600 college book stores saw a decrease in sales, the biggest losses came from their Nook digital division. Nook revenue was down by around 26% from the same time last year because of low holiday season sales.
Even with the low device sales, their digital content sales increased 6.8%. The loss comes at a time when there is a boom in sales for other tablets and e-readers. The company says it has a plan to significantly reduce Nook’s expenses.
“In terms of the Nook Media business, we’ve taken significant actions to begin to right size our cost structure in the Nook segment, while also taking a large markdown on Nook devices in order to enhance our ability to achieve our estimated sales plans in subsequent quarters,” said William Lynch, Barnes & Noble CEO in a statement. Okay, I’ve read this quote several times and still don’t know what “right size” means.
The same article states that Barnes & Noble stock rose 12% on the news that the company’s chairman and largest shareholder Len Riggio was interested in buying the bookseller’s chain of nearly 700 U.S. retail stores and taking them private.
What does this all mean? You guess is as good as mine. As a Kindle owner, I was surprised at the limited number of free and cheap books on B&N.com as compared to Amazon. Personally, I hope Barnes & Noble and Nook get their act together and continue to be viable players in the e-book market. There’s nothing like entering a Barnes & Noble store and browsing books. And as much as I love Amazon, but I’d hate to see them become the only choice.
All I know is that at this point, if Mom decides to buy a new e-reader, I’ll steer her toward the Kindle. Barnes & Noble’s future is too shaky to bet her e-reader on.
How many of you use a Nook? What do you think of Barnes & Nobles’ chances of recovering from this setback?