Barnes & Noble said on Wednesday that it planned to spin off its Nook business, once viewed as the company’s best hope for surviving in an age of a dominant Amazon.com, as a separate public company. The announcement moves Barnes & Noble forward on a plan it has considered for nearly two years. Over the last two years, the retailer has brought in Microsoft and the publisher Pearson as minority investors in the Nook business, in part to help defray the costs of building and selling e-readers. But the Nook — which Barnes & Noble once trumpeted as its best answer to Amazon.com and its wildly popular Kindle device — instead fell increasingly behind. Barnes & Noble has moved to downsize the unit, focusing more on media sales and teaming up with Samsung to build the devices.
Barnes & Noble unveiled plans Wednesday to break apart into two companies, separating its retail unit from its struggling Nook Media business. The bookstore operator said it plans to complete the separation by the end of the first quarter of 2015. The company has engaged Guggenheim Securities as financial advisers and Cravath, Swaine & Moore as legal counsel. The announcement comes after the company last year abandoned plans to split up, having weighed the idea of separating its retail and Nook operations for 18 months. “We have determined that these businesses will have the best chance of optimizing shareholder value if they are capitalized and operated separately,” Chief Executive Michael P. Huseby said in a statement. “We fully expect that our Retail and Nook Media businesses will continue to have long-term, successful business relationships with each other after separation.” Earlier this month, the company teamed up with hardware giant Samsung to launch co-branded tablets called the Samsung Galaxy Tab 4 Nook. The first of those tablets, featuring Samsung hardware and Barnes & Noble software, are due to reach US stores in August. Barnes & Noble had tried for years to find success in the tablet market with its Nook line, but facedconsiderable competition from much larger electronics players such as Apple and Samsung. More recently, Barnes & Noble has worked to cut back on its investment in the Nook business — which includes e-books, devices and accessories — as it tried to turn around the money-losing digital business.