Ahead of the Bell: Barnes & Noble CEO resigns
NEW YORK (AP) — Shares of Barnes & Noble Inc. slipped nearly 3 percent in premarket trading on Tuesday after the bookseller said its CEO is leaving and did not name a replacement.
Late Monday, the New York company said William Lynch was resigning after three years on the job. The change comes two weeks after Barnes & Noble said it would stop making its own Nook color touchscreen tablets, marking a major shift in the retailer's strategy.
Barnes & Noble has invested heavily in its e-books and e-book readers to offset rising competition from discounters and online retailers as well as consumers changing tastes in how they consume books.
Instead of naming a successor for Lynch, B&N said CFO Mike Huseby would become CEO of the Nook Media unit while Mitchell Klipper would remain CEO of the retail bookstores. Both report to chairman and company founder Len Riggio while the company reviews its strategic plan.
The moves show Riggio is reasserting his control over the company, said Janney Capital Markets analyst David Strasser.
Strasser said there had been a "big difference of opinion" between Riggio and Lynch on what the proper spending levels on the Nook division were, and the move shows Riggio will likely clamp down on spending on the Nook, or even lead a breakup of the two units.
Earlier this year Riggio made an offer to acquire the company's stores and Web site, but not the Nook business. B&N's board has been examining the offer.
"With no plans to hire a CEO in the near term, and Len Riggio once again in control, this management restructuring could bring the company closer to a more formal break up," Strasser wrote in a note to investors.
Shares of Barnes & Noble fell 50 cents, or 2.8 percent, to $17.16 in premarket trading. The stock had risen about 17 percent since the beginning of the year and has traded between $11.17 and $23.71 over the past 52 weeks.