Sun, Jan 29, 2012 - Page 5 News List

Barnes & Noble Inc eyes selling Nook devices outside US

Bloomberg

Barnes & Noble Inc, the largest US bookstore chain, is working on a deal to sell its Nook digital devices in stores outside the US for the first time, according to a person familiar with the situation.

The chain is developing a partnership with the UK’s Waterstones Booksellers Ltd to add the Nook to its locations this year, said the person, who declined to be identified because the talks are private. Waterstones, the largest bookstore chain in the UK, has about 300 stores.

Barnes & Noble is expanding its digital business overseas to catch up to Amazon.com Inc and Rakuten Inc’s Kobo brand, which both sell devices in the UK and other countries. The Nook, released in 2009, has been driving sales growth for Barnes & Noble as people switch to digital books.

“If they do increase the distribution for the product, it’s obviously a benefit for them,” said Michael Souers, an analyst for Standard & Poor’s in New York. “Amazon is still the behemoth in the market and has the upper hand because they were the first mover in the majority of markets.”

Souers recommends selling Barnes & Noble shares.

Barnes & Noble fell 0.2 percent to US$11.95 at the close in New York, where the company is based. The shares gained 2.3 percent last year.

Revenues from the Nook unit, including e-books and devices, rose 43 percent to US$448 million in the nine weeks ended on Dec. 31, while sales in stores rose 2.5 percent to US$1.2 billion. The company said the Nook business might generate US$1.5 billion in revenues in the fiscal year ending on April 30. That would account for about 20 percent of the company’s sales based on analysts’ estimates for annual revenues of US$7.33 billion.

Waterstones, purchased by billionaire Alexander Mamut’s A&NN Capital Fund Management Ltd last year from HMV Group PLC for £53 million (US$83 million), does not make its own e- reader. The London-based chain, which posted a decline in annual sales before being sold, began selling e-books and Sony Corp’s Reader in 2008.

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