Barnes & Noble Inc. stock tumbled 17 percent Thursday on the news the bookseller might spin off its Nook reader business.
The announcement came at the same time the company reported record holiday sales for its Nook reader, which competes with Amazon’s Kindle and similar devices. Sales for the period ending Dec. 31 were up 70 percent over the previous Christmas season, while its digital content sales grew by 113 percent.
“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,” CEO William Lynch said in a statement. “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. 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 said it is negotiating with potential partners to expand the Nook business abroad, including publishers, retailers and international technology firms.
Overall store sales were up 2.5 percent compared to the holiday period in 2010, to $1.2 billion. Same-store sales increased 3.4 percent, after increasing 9.7 percent a year earlier. Non-digital merchandise sales at physical locations increased 4.5 percent on the year.