The Deal: B&N Should Take a Page From Indigo Books
NEW YORK (The Deal) -- As Barnes & Noble
Canada's largest bookstore chain, Indigo Books & Music, was once in a similar situation, according to Hilco Organization's SD Retail Consulting President Antony Karabus. Like Barnes & Noble's Nook e-reader, Indigo had tried to go up against the big boys in the field -- Amazon
But when Indigo sold Kobo to Tokyo-based Rakuten for $315 million in November 2011, it gave the company a cash infusion, which it used to transform from primarily a bookseller to more of a lifestyle retailer, selling in complementary categories such as home accents and children's learning, Karabus said.
And Rakuten got a win from the deal because the Japanese online retailer could take the Kobo e-reader international and compete in less-saturated markets overseas.
The Nook, similarly, could benefit by also being introduced into new markets, rather than focusing all its marketing efforts on the intensely competitive U.S., where it is going up against Amazon's Kindle and Apple's iPad, Karabus said.
Right now, all that Nook signifies for Barnes & Noble is an "albatross," as Janney Capital Markets analyst David Strasser put it in a research note Tuesday.
"NOOK continues to be a drag on the company, with a sales decline of 20% and adjusted
Strasser also decried what appeared to be a lack of long-term strategy for Nook from management, which coupled with Riggio's decision not to bid for the company contributes to a "bleak outlook," at least for the near term.
There are big investors who obviously believe there is a place for another e-book reader in the literary marketplace. Pearson PLC