Ailing bookseller Barnes & Noble should split into two businesses — the Nook digital business and the retail store locations — and Microsoft should buy the Nook business, said Ingram Content Group chairman and CEO John Ingram, speaking candidly at the Evangelical Christian Publishers Association Leadership Conference in Nashville.
“The Barnes and Noble business is still a good business,” he said, responding to a question from the audience of over 100 executives from Christian publishing houses. “The store business can be carved away from the Nook business and it will be okay.”
The question from the audience presupposed Nook’s demise. Ingram, who heads the largest book distributor in the world which likely does more business with Barnes & Noble than any of its other partners, did not share the opinion. He blamed Barnes & Noble’s recent problems on heavy losses at the Nook division.
“The nook business should owned by Microsoft,” he said. “But Microsoft is too dysfunctional right now and they’ve had too many failures with new technology but the Nook technology is good and they should own that.”
Through a sizable investment in the entity now known as Nook Media — a joint venture between Barnes & Noble and Microsoft — the software giant owns nearly 18% of the company, which is comprised of the Nook device and digital content business as well as the chain of some 600 college bookstores. The investment from the spring of last year valued the business at about $1.7 billion, much more than investors had valued it at the time. Diversified publisher Pearson also owns a piece of the company through a $90 million investment in it late last year.
In Feb. of this year, Barnes & Noble founder and chairman announced his intention to buy Barnes & Noble’s retail stores and take the operation private.
Ingram did not seem to be under the illusion that once the retail division was separated from Nook it would embark on a period of growth.
“I think Len Riggio will manage them well and ride them off into the sunset for some time,” he said, adding, “I think there always will be independent bookstores.”
Barnes & Noble has been under intense scrutiny from the publishing industry after several quarters of disappointing sales on the digital side.