Nook, the digital book and e-reader business that has helped
keep Barnes & Noble (NYSE:
) afloat, did not meet sales expectations this holiday season. In
, Barnes & Noble said that based on "preliminary sales
results," the company expects its holiday sales to fall below
expectations. "The Nook business will not meet the company's prior
projection for fiscal year 2013," the company added.
This announcement comes only one day after Pew Research Center
revealed the results of a
involving e-readers and the transition to digital entertainment.
Researchers found that 23 percent of Americans now read digital
books -- up from 16 percent last year. Conversely, only 67 percent
of Americans read paper books -- down from 72 percent last
Theoretically, this should have allowed Barnes & Noble to
continue meeting or exceeding Nook sales expectations. However,
there is another underlying trend that has prevented this from
occurring: While consumers are more accepting of the digital
format, they are more likely to read books on a tablet instead of a
This is a problem not only for Barnes & Noble but for Amazon
) as well. The Kindle Fire may be successful, but without any
specific sales figures, it is impossible to say exactly how well
the device is performing.
As of August, the Kindle Fire had acquired
22 percent of the tablet market
in America. Amazon has yet to provide an update on the device's
While Barnes & Noble has bragged about the overall revenue
earned from its Nook business (which includes tablets, e-readers
and digital books), the company has yet to reveal specific sales or
market share data.
Instead, Barnes & Noble is focusing on more positive
details. The company rose more than seven percent today on the news
that it had received a strategic investment from Pearson (NYSE:
"Pearson and Barnes & Noble have been valued partners for
decades, and in recent years both have invested heavily and
imaginatively to provide engaging and effective digital reading and
learning experiences," Will Ethridge, Chief Executive Officer of
Pearson North America, said in a
. "This new agreement extends our partnership and deepens our
commitment to provide better, easier experiences for our
Ethridge added that the investment will "allow our two companies
to work closely together in order to create a more seamless and
effective experience for students."
Barnes & Noble investors seem to agree. Pearson investors
are less enthused; that stock is currently down less than one
Even so, investors should question the partnership and its
ability to provide Barnes & Noble with a successful future.
Brick-and-mortar bookstores are struggling and have been struggling
for quite some time. Now Barnes & Noble's most promising
division is in trouble as consumers switch to tablets, particularly
those manufactured by competing firms.
Year-to-date, Barnes & Noble is up more than one percent.
The company rose more than 12 percent over the last three
(c) 2012 Benzinga.com. Benzinga does not provide investment advice.
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