Barnes & Noble, Inc. Stock Down 12% on CEO Firing: What Investors Should Know Now
Disruption to the retail bookselling business and a digital strategy that hasn't met expectations may have doomed Biore from the start. Image source: Getty Images.
What: Shares of retailerBarnes & Noble, Inc.(NYSE: BKS) are down 11.5% at 1:17 p.m. EDT on August 17, after the company issued a press release late on the 16th, announcing the departure of CEO Ronald Boire. Boire will leave the company after less than one year on the job, having taken over as CEO in September of 2015.
So what: Here's the statement from Barnes & Noble:
Now what: While sales were nearly flat over the past year, the pressure on the retail bookseller to reinvent itself isn't going away. There remains demand for printed books, but online competition will continue to weaken that business, while digital books continue to make the printed books pie less and less meaningful. Combined, it's hard to look into the future and see Barnes & Noble having a sustained path forward as the business exists today.
There are plans under way to reinvent the company, including testing new concepts, including restaurants with expanded menus, including beer & wine, in an effort to increase traffic and consumer interest.Maybe that works. Maybe not.
But here's the bottom line: The company has a core business that is being disrupted by online retail, just like nearly every retail business, and that business is built on selling a product that's also being disrupted by technology. And it just fired its CEO after less than one year.
There are few things to like about Barnes & Noble as an investment right now, and a lot of reasons things could only get worse from here.
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Jason Hall has no position in any stocks mentioned. The Motley Fool owns shares of Barnes and Noble. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.