Nook’s Pivotal Month
In early June, Barnes and Noble announced a partnership with Samsung to produce a co-branded Nook, a move that effectively signaled B&Ns evacuation of the e-reader space. CEO Huseby called it “a major milestone in Barnes & Noble’s efforts to rationalize the NOOK business.”
Now, three weeks later, Barnes and Noble announces its plans to sever the retail business from the Nook business, creating two separate, publicly-traded companies. Response among commentators, reading the latest earnings reports: it’s a good move, that will allow the stable retail business to break free of the weight of the digital.
That second announcement was really two and a half years in coming. Back in January 2012, of course, the split was attractive for exactly opposite reasons: the Nook business was “a faster-growing technology asset trapped within a slower retail stock”. Back then, investors were “frightened of the prospect of a Barnes & Noble stock that would reflect only its traditional retail business.”
Times change. Now Nook is far from the “fast-growing tech asset” it was seen as in 2012, with revenues down 35% for the year. Suddenly it’s the retail business that shareholders wish they could value separately.
But times will change again. With its new Samsung partnership, and the decreased exposure it will enjoy by not being in the hardware development game, can Nook succeed where it once stumbled?
Perhaps. But now it will have to do so on its own.