Barnes & Noble Plunges After CEO Ouster Brings Fresh Turmoilby
Founder Leonard Riggio will take over duties during CEO search
Retailer says Boire ‘was not a good fit for the organization’
Barnes & Noble Inc. suffered its worst stock decline in more than eight months after ousting Chief Executive Officer Ron Boire, saying he wasn’t the right person to revamp a bookstore chain struggling to compete with Amazon.com Inc.
Management duties will be handed over to 75-year-old founder Leonard Riggio and other executives while Barnes & Noble searches for a new CEO. As part of the shake-up, Riggio will postpone his retirement as executive chairman, the New York-based company said late Tuesday. Boire was on the job less than a year.
The departure brings fresh upheaval to a chain reeling from the rise of e-books and online rivals. Boire, a former Sears Canada Inc. executive who became CEO in September of last year, had sought to revive growth by increasing the shelf space allotted to non-book merchandise like toys and games.
“The board of directors determined that Mr. Boire was not a good fit for the organization and that it was in the interest of all parties for him to leave the company,” Barnes & Noble said in a statement.
The shares fell as much as 13 percent to $11.58, marking their worst performance since Dec. 4. As of 10:52 a.m. in New York, they were down 10 percent for the day. Barnes & Noble has gained 54 percent this year, lifted in part by optimism that Boire could engineer a comeback.
Boire has been working to turn the company’s stores into centers for customer experiences. That included a plan to open four new concept stores with restaurants attached. He also brought on another former Sears executive, Michael Ladd, as vice president of stores.
“The company will continue to execute on its previously announced strategic initiatives,” Barnes & Noble said in Tuesday’s statement.
Last year, Barnes & Noble spun off its college bookstore unit as a separate public concern. That left behind a company with 640 stores, an e-commerce site and an e-book unit -- but no clear path to regaining its relevance. While sales at its locations have stopped declining, growth prospects are dim.
Riggio began Barnes & Noble in 1965 with a single store that sold low-cost college textbooks. He later bought the Barnes & Noble name and its Manhattan flagship store, setting the stage for bigger ambitions. A string of acquisitions, including the purchase of B. Dalton, helped turned the company into the biggest U.S. bookstore chain.
But the shift of books and other media online took a toll on the industry. Barnes & Noble shuttered stores, and chief rival Borders Group Inc. went bankrupt in 2011.
Riggio had been scheduled to be replaced as chairman by director Paul Guenther at the close of the company’s annual meeting on Sept. 14. When he announced his planned retirement in April, he said the company was in good hands.
“I have complete confidence in the management team and their ability to take this company to the next level of bookselling,” he said at the time. “I have every intention of offering my help and support.”
(An earlier version of this story was corrected to fix the name of an executive.)