Barnes & Noble on the Block? Get Ready, Amazon

Barnes & Noble is considering putting itself up for sale to “maximize shareholder value.” Could that be part of a plan to ditch those brick-and-mortar stores and focus on Internet retail?

Barnes and Noble for sale


The world’s largest book retailer, Barnes & Noble, announced Tuesday that its board of directors is considering selling the company in order to increase shareholder value. As the bookseller explained today, the board has formed a team to evaluate “strategic alternatives” to make sure it’s “taking advantage of [its] compelling digital opportunities.” Putting the company on the block is one of those alternatives.

Just how compelling are these digital opportunities? B&N’s online store is exploding, with sales increasing 51% last quarter and 32% the quarter before that. In the next fiscal year, Web sales are expected to increase 75% to $1 billion. The Nook, Barnes & Noble’s answer to Amazon‘s Kindle, has arrived with a splash in the e-reader market, outselling the Kindle in its first month on sale. And a price drop in June should help swell the Nook’s success.

Clearly, Barnes & Noble has watched Amazon rip into its market share long enough–and its fight back is beginning to draw blood. As with Blockbuster, which has long-watched Netflix bite away at its revenues, what B&N has finally realized is that its future depends on the company’s ability to remain digitally dynamic. (Blockbuster CEO Jim Keyes recently compared his company to Barnes & Noble, and said B&N had a strong business model to compete with Amazon’s.)

B&N has been making further strides into the digital realm. In recent weeks, the company has been touting its apps for the Android. Just yesterday, the retailer announced a new Web-based textbook rental service for college students.

The company’s recent forays into the digital market, coupled with today’s statement, suggests that B&N may be prepared to give up its brick & mortar operations. Of course, such a dramatic shift for the company is still a long way off, but even hints of a new digital direction for B&N ought to be a threat to Jeff Bezos. Take it from Blockbuster head Jim Keyes, who knows better than most.

“Anyone with that much market share is vulnerable to new competitors,” Keyes said recently.

About the author

Austin Carr writes about design and technology for Fast Company magazine.