(Bloomberg) -- Barnes & Noble Inc., on the verge of going private in a deal with Elliott Management Corp., reported another quarter of declining sales -- underscoring the challenge the New York hedge fund will face in turning the book retailer around.
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- Sales of $755.4 million in the most recent quarter represent a decrease of 3.9% from the same quarter a year earlier. The company also reported comparable sales, a key measure of retail success, fell 2.3%.
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Key Insights
- Elliott is putting James Daunt, chief executive officer of its British chain Waterstones, in charge of Barnes & Noble. The results show that Daunt will have his work cut out for him to reverse the chain’s steady sales declines.
- Daunt has helped Waterstones improve by giving individual stores more autonomy in tailoring their offerings to local preferences. It’s still not clear what path Elliott will take with Barnes & Noble.
- One positive sign was a slight improvement in gross margin, which rose to 29.4%, from 29.1% a year earlier.
Market Reaction
- The shares fell less than 1% in early trading on Wednesday. Tuesday’s closing price of $6.68 is above Elliott’s buyout price of $6.50.
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