Dmall takes grocery orders online and employs workers who buy the items in supermarkets and delivery them quickly to consumers.
The bookstore chain contemplates making Nook a separate organization.
The Nook electronic book reader and digital content business is doing so well on the top line for Barnes & Noble Inc. that the company is thinking about spinning off Nook into a separate business. But the continued higher costs of developing Nook also are causing Barnes & Noble to forecast bigger losses for fiscal 2012.
Details about when—or if—Barnes & Noble, No. 41 in the Internet Retailer Top 500 Guide, will make its Nook business into its own stand-alone entity are unclear. But in an update on Nook holiday sales results, Barnes & Noble says operating Nook as an independent segment is under consideration. “In order to capitalize on the rapid growth of the Nook digital business and its favorable leadership position in the expanding market for digital content, the company has decided to pursue strategic exploratory work to separate the Nook business,” says Barnes & Noble.
Barnes & Noble CEO William Lynch says the retailer is also in discussion with several other undisclosed retailers, publishers and technology companies about expanding the Nook business internationally. William Lynch will deliver the keynote address at the 2012 Internet Retailer Conference & Exhibition in Chicago on June 6 from 8:45 a.m. to 9:15 a.m. in a session titled “How the web has become the engine that drives retailing."
“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,” says Lynch. “In Nook, we’ve established one of the world’s best retail platforms for the sale of digital copyright content. 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.”
At the same time Barnes & Noble is looking at a possible spinoff, the company also warned Wall Street investors the company is looking at bigger than expected losses for fiscal 2012 because of its Nook expansion efforts. In updated guidance, Barnes & Noble now forecasts fiscal year 2012 consolidated sales to range from $7 billion to $7.2 billion and losses per-share to range from of $1.40 to $1.10. The company did not issue any guidance for full-year net income. "The change in guidance is due primarily to a shortfall in the expected sales of Nook Simple Touch, as well as additional investments in growing the Nook business, such as advertising to support new products and international expansion in the back half of the year," the company says." Barnes & Noble introduced the Nook Simple Touch, the latest version of its e-reader, in June 2011.
For the month ended Dec. 31, Barnes & Noble says sales of Nook electronic book readers and tablets increased year over year by 70% while digital content sales rose 112% over the previous year. Though Barnes & Noble didn’t release specific holiday Nook or digital content sales numbers, the retailer says it expects digital content sales to reach about $450 million in fiscal 2012, up 80% from $250 million in 2011.