World’s Largest Bookseller Barnes & Noble Considers Selling Itself

According to the LA Times and Wall Street Journal, Barnes and Noble announced yesterday that it was considering placing itself up for sale. Huge decreases in market sales, brought about largely by high competition with Amazon and a late jump into the e-reader market, have greatly affected the retail chain. Barnes and Noble had market capitalization of 2.2 billion in 2001 but is currently down to only 950 million. The company’s shareholder’s are disillusioned due to falling stock prices for the retail book giant and pressured the Board of Directors to make the move.

Barnes and Noble, which operates 720 stores in the United States has found it increasingly difficult to compete in the digital marketplace despite it’s introduction last year of its e-reader the Nook. Barnes and Noble also has as several different e-reader applications that make it possible for Barnes and Noble e-Books to be read on cell phones, hand-held devices and personal computers.

Barnes and Noble’s e-reader application has a relatively unique feature which lets you share your e-Books with friends or family members, a feature lacking in most e-Book applications and devices. Still, even with this feature, Barnes and Noble struggles to compete in the digital marketplace, with Amazon sitting squarely in Barnes and Noble’s path as a giant stumbling block. Amazon introduced Kindle, its e-reader in 2007 giving it a jump on the competition; Barnes and Noble did not introduce their e-reader, the Nook, until 2009.  As if this wasn’t enough Barnes and Noble now also has to compete with the introduction of Apple’s iPad with its e-reading capability.

Barnes and Noble began in 1965 with Leonard Riggio, who still sits on the company’s board. Riggio is rumored to be trying to pull together the funds to purchase Barnes and Noble and take the company private, removing it from the New York Stock Exchange. He faces stiff competition from fellow board member Ron Burkle who is vying for majority stock in the company to allow for a hostile takeover. Burkle is currently blocked from accumulating more than 20% of Barnes and Noble stock due to a resolution on the part of the company’s board that no one can hold more than 20% of the company’s stock, a move to stop hostile takeover’s on the company’s part. Burkle currently owns 19% of the stock and is suing Barnes and Noble to have the resolution overturned. Burkle is rumored to be likewise looking to purchase the company if it does go for sale.

Barnes and Noble is currently the world’s largest bookstore with 300 million dollars in online and in store book sales annually.

For more information on the history of Barnes and Noble go to the company’s website.

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