Barnes & Noble Considers Spinning Off Nook E-Reader Unit

Posted Jan 5, 2012

Book retailer company Barnes & Noble is considering spinning off their Nook e-reader unit so that they can continue to scale that business.  Barnes & Noble wants to “unlock” the value of the Nook unit.  Barnes & Noble is projecting that they will earn revenues of $7 and $7.2 billion in 2012 even though Wall Street was predicting $7.33 billion.  The losses are due to investments in the Nook business and sales of the Nook Simple Touch.

Another possibility is that Barnes & Noble may looking into international expansion of the device with manufacturing partners.  Barnes & Noble said that the Nook unit sales were up 70% from one year ago.  The Nook Tablet sales had exceeded their expectations, yet sales of the Nook Simple Touch did not do very well.

Barnes & Noble is projecting digital content sales of $450 million for the fiscal year 2012.  By the end of 2012, the company is predicting that the run rate of digital content sales will be at about $700 to $750 million.

As of right now, Barnes & Noble’s brick and mortar retail overshadows the Nook device so there is no telling what will happen if they spin it off as a separate entity.  Barnes & Noble’s retail stores’ nine-week holiday sales were up 2.5% from a year ago to $1.2 billion. sales are also up 43% to $327 million during the same period.