Barnes and Noble has lost over one billion dollars on trying to make the Nook brand into a viable business model. Since 2009 the largest bookseller in the US has gone through two CEO’s and has just announced they have hired their third, Ron Boire, who starts this September. It looks like the Nook brand is in seriously jeopardy.
Boire—who has only been CEO of the faltering Sears Canada department store chain for the last ten months has kept the store in business by closing retail locations and axing thousands of job will be the new CEO of Barnes and Noble. His number one priority with the company is to stem the blood loss from the ailing Nook division. Last week Barnes and Noble announced that Nook hardware and e-books sales fell 40% in the three months ending May 2 and declined 48% year on year.
Before being the CEO of Sears, Ron was CEO of Brookstone, a chain that improved on his watch but nevertheless filed for bankruptcy protection two years after he left. From 2003 to 2006 he worked at Best Buy and he was responsible for global technology and vendor management, global sourcing, and private label development. And in his 17 years at Sony he had tech experience in personal mobile products.
Obviously Ron has an impressive resume but an entire digital industry passed him by. He was not actively working in tech when the original iPad came out, or the first generation Kindle. He did not play a role when people gravitated away from visiting websites and a billion dollar app market developed. It remains highly dubious that he can fundamentally understand the core of the Nook business and their competition.
As an outsider I think Ron will quickly realize what type of financial black hole Nook really is and not feel any loyalties towards it. It is my belief that he will abandon hardware and accessories and focus on audiobooks and e-books, which have low overhead and high profit margins.
Ron starts the job this September and likely there will be a period in which no major decisions will be made. I have it on good authority that a new Nook e-reader is in development and should be announced in September or October. This might be the last, at least there should be no shortage of Nook related news in the next calendar year.