Barnes & Noble Looks To Spin-Off Nook Amid Record Sales

Chris CrumTechnology

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Barnes & Noble announced today that it is pursuing “strategic exploratory work to separate its Nook business”. In other words, the company is looking to spin Nook off.

“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 CEO William Lynch. “In Nook we’ve established one of the world’s best retail platforms for the sale of digital copyright content.

“We have a large and growing installed base of millions of satisfied customers buying digital content from us, and we have a Nook business that’s growing rapidly year-over-year and should be approximately $1.5 billion in comparable sales this fiscal year,” he added. “Between continued projected growth in the U.S., and the opportunity for Nook internationally in the next 12 months, we expect the business to continue to scale rapidly for the foreseeable future.”

The company is currently in discussions with publishers, retailers and tech companies in international markets to find a good home for the business. Barnes & Noble is careful to note, however, that there is no assurance that Nook will be separated.

There is also no timetable for the review, the company says, adding that it will not be commenting on the matter until a decision is made.

The timing of all of this is very interesting, considering that the company just announced record Nook sales. During the nine-week holiday season, they experienced a 70% increase over the same period last year for Nook unit sales. These include sales of: Nook simple Touch, Nook Color and the new Nook tablet. Digital content sales (digital books, digital newsstand, apps) increased 113%.

The company expects fiscal 2012 digital content sales to be around $450 million.

It is the Nook’s rapid growth, that the company is deeming it the right time to capitalize on a spin-off.

The company will release its Q3 earnings around “on or around” February 21.

The Nook Tablet debuted as a direct competitor to Amazon’s Kindle Fire in November, with a slightly higher price tag of $249.

Given the rivalry between Amazon and Walmart, and the fact that B&N is talking with retailers, I wouldn’t be surprised to see Walmart emerge as a potential suitor for the Nook. By the way, it looks like the Kindle Fire has another competitor on the way.

Chris Crum
Chris Crum has been a part of the WebProNews team and the iEntry Network of B2B Publications since 2003. Follow Chris on Twitter, on StumbleUpon, on Pinterest and/or on Google: +Chris Crum.