Struggling bookseller Barnes & Noble warned Thursday that the company expects to lose more money this year and surprised investors by saying it was exploring strategic alternatives for its e-reader Nook division.
Shares of Barnes & Noble closed Thursday down more than 28 percent.
Barnes & Noble launched the Nook division in 2009 and “expects full-year same-store sales for the Nook business of about $1.5 billion,” according to the Wall Street Journal. And for the company as a whole “a per-share loss of $1.10 to $1.40 on revenue of $7 billion to $7.2 billion and same-store sales growth of 1% for the fiscal year ending in April.”
Sales of the Nook remain relatively small in Barnes & Noble’s overall revenue picture.
“BN.com sales increased 43% over the prior year period to $327 million, with comparable sales increasing 52% … This increase was driven by continued growth of the Nook business, offset by a decline in online physical product sales,” the company wrote in a statement Thursday.
Sales of e-books are fast replacing those of traditional printed books. Amazon late last spring reported that its sales of e-books had exceeded its sales of printed books. The online retailing behemoth began selling e-books four years ago through its Kindle e-reader device. Amazon reported selling 1 million Kindle Fire units each week in December.
Legacy book retailers, including Barnes & Noble have struggled, or in the case of Borders Group, failed. Borders, which owned Borders and Waldenbooks, liquidated after filing for Chapter 11 bankruptcy in February 2011. Barnes & Noble’s attempt to sell itself ended when Borders Group filed for bankruptcy and saturated the market for distressed bookstore assets. Instead, Barnes & Noble accepted an investment from John Malone’s Liberty Media.
Questions remain about whether or not Barnes & Noble has the capital required to continue the e-reader’s success. Some have suggested an independent Nook business might be able to partner with a larger retailer.