The next news event for Barnes & Noble will be the reporting of first quarter earnings tomorrow morning. Analysts surveyed by Thompson Reuters are expecting a loss of 80 cents a share on sales of $1.42 billion, though the company’s guidance was for a new loss in a range of 85 cents to $1.15 a share. The net loss for the fourth quarter of fiscal 2010, reported June 28, was 89 cents a share. At the time, BN said they expected first quarter Barnes & Noble.com sales–where Nook revenues are recorded–to increase between 30 percent and 50 percent. BN store comps were expected to range from flat to up 3 percent, and college comps were expected to be flat.
Meanwhile, an unspecified “source familiar with the sales process” tells Reuters “nothing is going to happen for a while. It is a long road we’re on.” The source also says “A sale isn’t the only option. It’s a full process. Restructuring and any number of options are on the table.” (Given that the company has very little debt, restructuring probably implies a potential rearrangement of the company’s assets (the superstores; Nook and the online store; the college stores; and the publishing division).
Separately, NY Magazine has a long piece on the battle between Len Riggio and Ron Burkle, with interviews with both principals. Their quotes would indicate an unwillingness to partner in taking the company private.
Riggio laments that he was “‘the largest single sucker’ in the ruinous investment in Source Interlink,” controlled at the time by Burkle. Referring to a letter Burkle wrote following the announcement of the deal with Barnes & Noble College, Riggio wrote: “He told me he saw himself as a ‘humanist,’ perhaps owing to his associating with the former president. This was all the proof I needed to my growing suspicion that he was delusional.” He also wrote: “What I realized then, and I now know with conviction, is that this guy actually believes that all the distasteful things he does are virtuous. Therefore it is an absolutely no-win situation to engage him in a game he loves to play.”
Burkle expresses nearly the same sentiment in a different way: “I think it’d be hard to take anything private with Len. He has way too many conflicts.” And he remarks, “With Len, you’re either on the good-guy list or the bad-guy list, and I think I’m on the bad-guy list.”
Of course it’s hard to take Burkle’s comments at face value. He still pretends that “I’m not trying to get control, I just think that with the issues in front of the company, you need new, independent board members.” And he says, “This is not a battle between Len and I, even though that’s what everyone wants it to be.” Yet “in the next breath, Burkle said that now that Barnes & Noble’s board was looking for a buyer, he would certainly consider a bid.”
His larger position is that “I think people will continue to buy books. But even if we’re wrong, Barnes & Noble will still be alive for five or ten more years. They really should be the last store standing.”