Barnes and Noble, Inc. (NYSE:BKS) announced yesterday that it is naming a special committee to review the current bids for its company. The Barnes and Noble potential sale news sent shares flying this morning.
Barnes and Noble Potential Sale
The book retailer said in its statement it has received “expressions of interest” from various parties. One of the parties interested in buying up on the potential sale is the bookseller’s current Chairman, Leonard Riggio, who founded Barnes and Noble back in 1965.
Riggio “has committed to support and vote his shares in favor of any transaction recommended by the special committee,” Barnes and Noble said.
The US-based bookseller faces heightened competition from Amazon and other retailers that are moving books online. Heading into the holiday season, Barnes and Noble is struggling to grow sales. In Q2 of 2018, the retailer said its revenue declined 6.9 percent. Selling the company may be its only option out.
Part of the bookseller’s ‘turnaround’ plan is closing a portion of its 600 stores across the US and relocating to smaller retail spaces that would give it a fresh and modern look. Barnes and Noble’s new prototype stores encourage shoppers to buy books online on their website, instead of going elsewhere.
However, not everyone thinks the lack of presence online is the only issue with the company.
“Consumers want unique experiences and escapes—we think they are finding that in independent bookstores,” David Schick, managing partner at Consumer Edge Research, told the Chicago Tribune. “Consumers want to feel a connection to their stores. We do believe Barnes & Noble can make some enhancements that could matter, but it will take time and investment.”
Currently, Riggio still owns 19 percent of Barnes and Noble. Riggio served as the company’s CEO from 1986 through 2002 and then again from late 2016 through April of 2017. The company also says it’s adopting a shareholder rights plan.
The bookseller’s shares have fallen 18 percent since the beginning of 2018. According to Yahoo Finance, BKS is trading at $6.53 a share, up $1.07 (+19.60%).
Do you think a Barnes and Noble sale would be enough to save the bookseller?
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