Barnes & Noble Inc. (BKS) named former cable television executive Michael Huseby chief financial officer as the largest U.S. bookstore chain shifts toward becoming more of a technology company.
The former CFO at Cablevision Systems Corp. (CVC) will oversee Barnes & Noble’s capital structure and help boost its digital business, the New York-based company said today in a statement. Huseby replaces Joseph Lombardi, who resigned in October. Allen Lindstrom had been CFO on an interim basis.
Huseby, who helped Cablevision spin off two units before leaving in June, joins Barnes & Noble as it considers separating its Nook digital unit into a separate company so investors will give it the higher valuation of a technology business. The company also is considering offering more detailed financial reporting on the Nook’s performance.
“Appointing a CFO with significant tech, spinoff and mergers-and-acquisitions experience suggests to us that Barnes & Noble is continuing to look at unlocking the value of Nook,” David Schick, a Baltimore-based analyst for Stifel Nicolaus & Co., wrote in a note to clients. He recommends buying the shares.
Barnes & Noble rose 1.6 percent to $13.61 at the close in New York. The shares have declined 6 percent this year.
$1.5 Billion Nook
While Barnes & Noble operates about 700 retail locations and more than 600 college bookstores, its future growth lies in electronic books. The company started its digital business in 2009 by selling e-books and releasing the Nook e-reader. The company projects the Nook business will generate $1.5 billion in sales in the fiscal year ending April 30, accounting for about 20 percent of its total revenue.
The retailer sells the second most e-books in the U.S. after Amazon.com Inc. (AMZN) Barnes & Noble has sacrificed profits by spending on developing devices, advertising and building boutiques in stores to showcase the Nook. The company posted a net loss of $70.6 million in the 12 months through January.
The losses and concern that Barnes & Noble won’t be able to maintain spending to compete with Amazon and Apple Inc. (AAPL), which sells e-books through devices such as the iPad, has weighed on its shares.
Sales from Barnes & Noble’s digital unit, which includes Nook tablet computers, content and accessories, rose 38 percent to $542 million in the quarter ended Jan. 28, while total sales advanced 5 percent to $2.44 billion.
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