Beleaguered by tough competition from retailers like Amazon and Wal-Mart, Barnes & Noble on Wednesday said that it has planned separation of its Nook e-reader division, looking for boosting its shareholder value.
According to the company insiders, the separation is likely to get completed by the end of the first quarter of the next calendar year, implying April of 2015.
The decision was hailed by the investors and the market outlook remained affirmative for the company. Its shares zoomed more than 6 percent in mid-day trading.
The largest brick-and-mortar bookseller in world, which has been outperforming its Nook unit, includes its bookstores and BN.com businesses in its retail business.
Nook Media houses the digital and college businesses of Barnes & Noble. Software companies like Microsoft Corp. and educational book publisher Pearson Inc. are among the investors of Nook Media.
In an interview, CEO Michael Huseby has said that the separation is the best option for shareholders.
‘‘The businesses can achieve a more favorable capital structure and also operate at a higher level if they are separate, he said.
Market analysts say Barnes & Noble has spent heavily in its Nook e-book reader and e-book library for years but unfortunately they struggled to be profitable.
According to Huseby, the company will continue to offer its Nook glowlight e-reader. However, the most part the Nook business will focus on software and its e-book library, he said.
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