Barnes & Noble Inc said on Monday that William Lynch has stepped down as CEO, effective immediately, just weeks after the book retailer announced weak sales, big losses and the declining popularity of its Nook e-readers.
Lynch’s resignation comes after just three years in the role. No successor was named, but the New York-based company said it was reviewing its strategic plan and would provide an update “when appropriate.” Shares fell nearly 5 percent in after-hours trading on the news.
In the wake of his departure, chief financial officer (CFO) Michael Huseby will become president of the company and CEO of its Nook Media unit. Controller Allen Lindstrom will succeed Huseby as CFO. Huseby and Mitchell Klipper, CEO of Barnes & Noble Retail Group, will report directly to Leonard Riggio, the firm’s chairman and largest shareholder with a nearly 30 percent stake.
Riggio declined an interview.
The news did not surprise some analysts.
“The board lost confidence in Lynch. Investors lost confidence,” Belus Capital Markets analyst Brian Sozzi said on Monday.
He said that Lynch did not have a definitive plan at the last earnings call, after Barnes & Noble posted a larger quarterly loss and said sales plunged in the three months ended April 30. Revenue at stores open at least a year dropped 8.8 percent and overall retail sales, which include Barnes & Noble bookstores and online sales, tumbled 10 percent, in part because of store closings.
Moreover, the company announced that it would stop making its own Nook color touchscreen tablets because they failed to keep up with competitors.
Barnes & Noble has been struggling to find its place as more readers have shifted to electronic books and competition has grown from discount stores and online competitors. The company, which has 675 bookstores in 50 states and 686 college bookstores, has been trying to avoid the fate of its former rival Borders Group, which did not adapt to the growing threat of the Internet and e-books and went out of business in 2011.
So, Barnes & Noble had been pouring money into developing its Nook devices to keep up with changing reading habits and beat back competition from retailers such as Amazon.com Inc, which makes the popular Kindle readers, and Apple Inc’s iPad.
The company hired Lynch from the home shopping network HSN Inc as president of its online business in February 2009. There, he expanded the company’s digital offerings and helped launch the Nook. Lynch, who had worked as an executive at Palm Inc, became CEO of Barnes & Noble in March 2010.
Last month, the company said it was going to continue to make its more basic, black-and-white e-readers, but will farm out the tablet manufacturing to a third-party. Lynch did not offer specifics of how a tablet partnership would work, but said at the time that the company was in discussions with “a lot of interested parties.”
Some speculated that Microsoft Corp, which has a 6.8 percent stake in the Nook unit, could offer to buy it outright.
The bad results troubled investors, who sent the shares down sharply. The stock had recovered a bit since then, closing on Monday at US$17.66.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is