The Barnes & Noble, Inc. (BKS) Saga Continues

Cutting costs

Barnes & Noble recently announced that it will discontinue its Nook color touchscreen tablets, but stick with its traditional e-readers. The Nook couldn’t compete with Amazon’s Kindle. This didn’t have to do with quality, but lack of an advertising budget for Barnes & Noble. When the Nook first became available, there was a lot of excitement surrounding it, but Barnes & Noble never followed through, seeming to rely on popular titles to carry its momentum. Those popular titles faded, and the Nook faded with them.

Many investors would like for Barnes & Noble, Inc. (NYSE:BKS) to to cut all hardware investments, sell all large physical retail stores, and reduce its workforce in order to move back toward profitability.

Conclusion

Barnes & Noble is fighting an uphill battle, and it’s a muddy and slippery hill, but there is still potential. If the company can drastically cut costs, then profits will improve. This, in turn, would lead to stock price appreciation. However, nobody knows how aggressive Barnes & Noble will be when it comes to cutting costs, making this a high-risk investment.

The long-term picture doesn’t look good for Barnes & Noble, Inc. (NYSE:BKS) unless it completely alters its business model. One idea often thrown out is much smaller stores with a cafe-like setting.

The article The Barnes & Noble Saga Continues originally appeared on Fool.com and is written by Dan Moskowitz.

Dan Moskowitz has no position in any stocks mentioned. The Motley Fool recommends Amazon.com. The Motley Fool owns shares of Amazon.com. Dan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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