Barnes & Noble shares are soaring today after founder Leonard Riggio has announced he wants to buy the retail assets of the chain he founded more than 40 years ago.
The buyout would be paid for in cash and would exclude the Nook and college books businesses, according to Kevin Orland and Cotten Timberlake at Bloomberg.
Barnes & Noble has reported net losses for two years, and its Nook business failed to gain the traction it needed to make money. The bookstore chain is also struggling as people move to electronic books.
But Riggio could help save the brand, David Strasser, an analyst with Janney Montgomery Scott, told Bloomberg.
“He knows the book business like the back of his hand,” Strasser said. “Turns out lots of people like books still. Nook is tougher and needs funding. E-readers have also hit a kind of wall at current penetration.”
Barnes & Noble said in a statement today that it would consider the proposal. Riggio currently owns about 30 per cent of the company’s stock.
The closing of bookstores selling print books could be hurting the sale of E-books, according to a recent New York Times article.
Many shoppers go into bookstores to find titles they’re interested in going home and ordering, wrote David Streitfeld. Without physical stores, the book business as a whole could suffer.
If Riggio can turn around Barnes & Noble, the publishing industry as a whole would benefit.
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