Barnes & Noble will spin off college bookstore division

Move comes as Amazon expands into the sector

Barnes & Noble announced Thursday that it will spin off its successful college bookstore business into a separate, publicly traded company.

"Separating Barnes & Noble Education will create an industry-leading, pure-play public company with more flexibility to pursue strategic opportunities in the growing educational services markets," Michael Huseby, Barnes & Noble's CEO, said in a statement. The company currently runs 714 college bookstores, and publishes e-textbooks via its Yuzu platform.

According to the New York Times, Barnes & Noble's college bookstore division is the most successful at the company, with $977 million in revenue over the 26 weeks that ended Nov. 1. However, the company has faced increased competition in the sector from Amazon, one of the other key players in the $10.3 billion college bookstore market.

Amazon announced in February plans to open a location at Purdue University, where students can pick up book orders, as well as return rented textbooks. The company already has similar partnerships with the University of California, Davis and the University of Massachusetts, Amherst.

In addition, students who use Amazon can get discounted membership to the company's Prime memberships—which provides inexpensive two-day shipping and other benefits. Students who opt not to purchase a Prime membership can receive free next-day delivery of textbooks.

Shareholders of Barnes & Noble will automatically receive stock in the new college bookstore company when the split becomes final (de la Merced, New York Times, 2/26).

The takeaway: Barnes and Noble will spin off its college bookstore division as a separate company, in a move which is expected to help the entity compete with rivals such as Amazon, who are expanding into the space.


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