Barnes & Noble Agonistes Continued

NYTimes.com:

Just over a week before Barnes & Noble shareholders convene for their annual meeting, Mr. [Len] Riggio remains locked in battle with the billionaire investor Ronald W. Burkle over three board seats, including Mr. Riggio’s. And Barnes & Noble has begun seeking potential buyers for the entire 1,350-store chain. ...

The fight over Barnes & Noble may seem disproportionate to what is at stake. The company’s market value has shrunk to less than $1 billion, and bookselling has been squeezed by Amazon.com on one end and Wal-Mart Stores on the other. But as Mr. Riggio says, the battle touches on deep reservoirs of sentiment about an empire he fashioned starting with a small bookstore 39 years ago. ...

Mr. Burkle said he was not seeking control of the company through the proxy fight, but wanted to have independent directors on the board. “I want someone in there who doesn’t say, ‘That’s the most amazing thing I ever heard’ every time Len opens his mouth,” he said.

Mr. Riggio’s biggest challenge remains grappling with the Internet, and he argues that digital bookselling is the biggest opportunity since the paperback revolution. Barnes & Noble’s e-reader, the Nook, has been making headway in sales, he said. (The company says it controls about 20 percent of the e-book market, based on information from publishers.)

He also pointed to growth at the company, which reported net income of $36.7 million on a 31 percent gain in revenue, to $5.8 billion, for the year ended May 1. For its most recent quarter, Barnes & Noble reported a 21 percent jump in overall revenue, to $1.4 billion, though it posted a $63 million net loss as a result of the legal fight with Mr. Burkle and weakening sales of print books.

Many analysts and industry executives do not share Mr. Riggio’s optimism. Shares in the company have tumbled 28.9 percent in the last year. An analyst at Bank of America Merrill Lynch downgraded Barnes & Noble to “underperform” last week, arguing that the company’s digital strategy faced major challenges from wealthier rivals like Amazon and Apple. ...