Today's news covers the 9 week holiday season, the period in which American retailers expect to cover their losses from the rest of the year, to "put them in the black".
FYI: That is an reference to old-fashioned ledgers, where a profitable day was recorded in black ink, and a money-losing day is written in red ink. It's also where Black Friday got its name.
Sales via B&N brick-and-mortar stores and the B&N website dropped 10.9% this holiday season, compared to the same period last year. Retail sales of Nook hardware in particular fell below B&N's expectations, belying the initial good sales over Black Friday weekend. “Nook device sales got off to a good start over the Black Friday period, but then fell short of expectations for the balance of holiday,” CEO William Lynch said. “We are examining the root cause of the December shortfall in sales, and will adjust our strategies accordingly going forward.”
The Nook segment had revenues of $311 million for the nine-week holiday season, down 12.6% as compared to last year. This is attributed to both fewer units sold as well as lower selling prices, and the loss was only partially ameliorated by an increase in digital content sales, which were up 13.1%.
Even though quite a few of my readers disagreed with me, I've been worried about B&N's Nook sales for quite some time. Ever since they ran a couple BOGO sales last Spring, and then followed them up with regular sales on refurbs, I've been convinced that the Nook hardware has been the albatross around the neck of B&N. And even as far back as the last holiday season there were signs that B&N was having difficulties moving hardware; sales of the Nook Touch were far below what B&N would have liked.
That's why they decided to spin it off, and that's why they've picked up piecemeal investments from MS and Pearson.
It's a pity they have not sold it yet. When I last covered this bad news, one of my readers pointed out that there were any number of potential buyers, including Rakuten, Microsoft, Best Buy, or a retail conglomerate like BAS Group or Tesco.
Right now I'm really hoping one of them might be interested in rescuing the Nook. In spite of the bad news today, there is still some real value in Nook Media. Oh, it's not worth the couple billion valuation which B&N has placed on it, but as an ebook platform what it really needs is to go international and or be picked up by a company which has the deep pockets B&N lacks.
image by Monica Arellano-Ongpin