One person possibly interested in buying Barnes & Noble is its chairman and founder Leonard Riggio, said the company in its new release. The news released noted that several parties expressed an interest in bidding on the company.
Barnes & Noble is a publicly listed company and the largest retail book vendor in the U.S. with 629 stores. It also includes the digital bookstore Nook, as well as the barnesandnoble.com website.
The board of directors of the company established a committee of its independent directors to oversee its strategic review. Riggio, who is owner of 19% of the business and the largest shareholder, pledged to support any transaction that the panel recommended.
Shares of Barnes & Noble, which prior to the news of a possible sale had fallen 30% over the last year, soared by 21% in trading after-hours on Wednesday.
The company, in its announcement that it was contemplating a possible sale, noted an unknown investor was rapidly purchasing its shares.
Annual revenue for the company exceeded $7 billion during 2012, but since has dropped to just $3.7 billion amidst competition from online giant Amazon and other companies in e-commerce. During September, Barnes & Noble posted $795 million in quarterly revenue, which was down 7% from the same period last year, as sales in stores continued sinking. For the three-month period the company lost $17 million.
Barnes & Noble has struggled over the last few years due to intense competition from online behemoth Amazon and the changes in consumer preferences.
One Wall Street analyst said the company has a real uphill climb to make to turn things around. He added that they survived despite Amazon and the other factors, but a bookstore that is only selling books and magazines is a relic of our past.
Despite strong headwinds for brick and mortar retailers, several analysts have the belief there is still a place for physical bookstores.
Riggio was CEO at Barnes & Noble when it was founded during 1986 until 2002 and then one more time from the latter part of 2016 until the end of April of 2017. Four CEOs have come and gone over the last five years.
The company said as well that it was adopting a shareholders rights plan due to noticing a rapid purchase of stocks by unidentified parties.