With slow non-digital book sales and strong sales for ebooks and Nook devices, these days Barnes & Noble is a tale of two cities.
Inside sources have indicated to the Wall Street Journal that the company will sell its publishing company Sterling Publishing, which it acquired in 2003 for $115 million, used mostly for printing of puzzle books, craft manuals, and cookbooks, as well as about 500 "classic" titles.
Barnes & Noble is experiencing poor non-digital book sales, only about 4.5% growth over last year. The company's Q3 reports showed a $6.6 million loss, and overall sales dropped 0.6% to $1.89 billion, as compared to $1.90 billion for the same period a year earlier.
And yet Nook and e-book sales are so strong that the company is starting to explore the possibility of spinning off the Nook division into a separate entity.
During the holidays, in the nine-week period ending December 31, sales of the Nook increased 70% over the same period in 2010, said Barnes & Noble in a statement. E-book sales grew an even more impressive 113% for the same time period. Total sales for digital content in the 2012 fiscal year are projected to be in the $700-$750 million range.
These considerations have caused the company to "pursue strategic exploratory work to separate the Nook business," to establish the Nook e-publishing as its own brand.
“We see substantial value in what we’ve built with our Nook business in only two years, and we believe it’s the right time to investigate our options to unlock that value,” said Barnes & Noble Chief Executive Officer, William Lynch, in the company's statement.
While the Nook has recieved very high ratings in the tech community, sales for the e-book tablet have not been so strong as those of Amazon's Kindlfe Fire. And though some have characterized the sale of Sterling publishing as insignificant in the big picture, as it never figured centrally to their brand, it seems clear that Barnes & Noble is increasinly redirecting focus to its thriving e-publishing wing, and away from its stalling non-digital division.
But will Barnes & Noble's reinvention of itself as a digital bookseller be enough? The company's investors are reportedly already up in arms over the rumored re-focus, with company shares during pre-market trading on Wednesday morning down 29%. These attempts at a reboot may prove to be too little, too late