B&N CEO Gets the Hook on Losses From Nook
Jul 9, 2013 12:40 PM PT
Barnes & Noble's board of directors on Monday announced changes in the company's executive ranks that extend all the way to the top echelon.
First and foremost, William Lynch has resigned as CEO and director effective immediately.
In addition, former CFO Michael Huseby has been appointed CEO of Nook Media and president of Barnes & Noble. Max Roberts, CEO of Barnes & Noble College, meanwhile, will continue to lead the company's digital education strategy, reporting to Huseby.
Huseby and Mitchell Klipper, CEO of the Barnes & Noble Retail Group, will report directly to Leonard Riggio, executive chairman of the company. Also, corporate controller Allen Lindstrom has been promoted to CFO and Kanuj Malhotra, vice president of corporate development, has been promoted to CFO of Nook Media.
"We thank William Lynch for helping transform Barnes & Noble into a leading digital content provider and for leading in the development of our award-winning line of Nook products," said Riggio.
"As the bookselling industry continues to undergo significant transformation, we believe that Michael, Mitchell and Max are the right executives to lead us into the future," he added.
Barnes & Noble is now in the process of reviewing its current strategic plan, Riggio noted.
The company declined to provide further details.
The Nook's Twilight
Such a dramatic reshuffling suggests the company is gearing up for big changes, or at least is planning a significant repositioning to shore up its business. What form those changes might take, however, is not yet clear.
To be sure, the troubled status of the Nook -- B&N recently announced it would cease manufacturing the higher-end versions of those tablets itself -- is a blow all its own. In that light, it is not surprising that Lynch is leaving -- he was, after all, supposed to lead the company through its digital revolution.
Of course, Lynch had formidable competition, Bruno Scap, president of Galeas Consulting, told the E-Commerce Times.
"The competition from already established players like Amazon, Google and Apple was too much for it to handle," he said.
Now, after a successful early launch, the company is looking to delegate manufacturing to an outside partner, Scap added, noting that "it sounds like they may spin off the digital business."
'Facing the Heat'
It is not a surprising outcome despite the early enthusiasm around the Nook, said N. Venkat Venkatraman, a business professor at Boston University.
The device has faced tough competition, and "those without software advantage are facing the heat more," Venkatraman told the E-Commerce Times. "Nook does not have a scale advantage, nor any user experience that is distinctive.
"I see it as going the way of Palm," he added. "This was supposed to be the valuable part of B&N, but I was never optimistic that B&N could pull it off, as it is not core to their corporate DNA."
Declining Book Sales
Amazon's presence has also left its mark in the book market, however, and Barnes & Noble is struggling with declining sales there as well. The reshuffling of its other executives, including new faces in the CFO suite, reflect that turmoil.
The synergy of the poorly performing digital strategy and declining sales is what forced its hand with these personnel moves, speculated Scott Spiewak, CEO of Fresh Impact PR Group.
"What is next is additional store closures in markets that are not producing," Spiewak told the E-Commerce Times. "I believe the retailer does have a chance to survive against competitors but needs to be extremely intentional about what they do and how they do it while continuing to emerge with trends in selling."
A Plan to Go Private?
It's possible, however, that the company has other plans. Riggio has proposed buying out B&N's retail division, noted Val Wright, principal of Val Wright Consulting. It could be that this executive reshuffling is a piece of Riggio's plan to take the retail stores private, she speculated.
"Riggio has decided not to replace Lynch as a CEO," she told the E-Commerce Times. "Is that because he wants to smooth the way for his potential buyout of the retail stores, leaving Nook Media group, which includes the college stores, as a public company?"
No timeline was announced for a decision on Riggio's buyout proposal, Wright added, "but now that he is actively running the company, this will likely cloud the decisions he is making in the short term."