Barnes & Noble Inc. (BKS) promoted Michael Huseby, who has served as its chief financial officer and president, to chief executive officer as the chain struggles to retain customers increasingly shifting to digital books.
Huseby also has been elected to the board, the New York-based company said today in a statement.
Barnes & Noble, which has more than 670 stores, has been heavily investing in its Nook digital unit to gain a foothold in electronic books. After some initial success with its Nook e-readers and tablets, the division’s sales slumped during the holidays in 2012 and haven’t recovered. Cratering sales led to the July departure of CEO William Lynch, leaving Huseby as the company’s top executive.
In its most recent quarter, Barnes & Noble reported sales fell 8 percent to $1.7 billion. The Nook division sales slumped 32 percent to $109 million in the period ended Oct. 26.
Last February, company founder Leonard Riggio, 72, who is also the chain’s chairman and largest shareholder, announced his intention to buy Barnes & Noble’s website and physical stores. He abandoned those plans in August.
Huseby sits on the board of Charter Communications Inc., which has Liberty Media Corp. as its largest shareholder, with about 26 percent of the stock. He served as Charter’s chief financial officer for the first eight months of 2004.
His appointment signals the continued interest of Liberty, said John Tinker, an analyst at Maxim Group in New York. Liberty made a $17-a-share, or about $1 billion, buyout bid for Barnes & Noble in May 2011 before withdrawing and buying a 17 percent stake for $204 million and securing two board seats.
“The store business is still extremely profitable,” said Tinker, who recommends buying the shares. “It is a melting iceberg, but so far it’s been melting very slowly.”
Huseby joined Barnes & Noble as chief financial officer in March 2012 after a career in the cable industry, including as CFO at Cablevision Systems Corp.
Microsoft Corp. and Pearson Plc invested in the Nook Media unit in 2012. Pearson’s 5 percent stake, which came after Microsoft announced about an 18 percent purchase, valued the subsidiary at $1.79 billion.
Riggio founded the company in 1965 with a college bookstore in Manhattan. Six years later, he bought the Barnes & Noble name and its flagship store, beginning a spree of acquisitions, including Doubleday Bookshops. The chain started focusing on superstores, instead of mall sites, in the 1990s.
Last month, Barnes & Noble disclosed that the U.S. Securities and Exchange Commission had started an investigation into the chain’s restatement of earnings and a former employee’s allegation of improper accounting. The company said it was cooperating with the SEC.
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