In making his case at a Wednesday afternoon Liberty Media investor conference why Barnes & Noble, with an “enterprise value” of $1.33 billion, is undervalued CEO William Lynch laid out the strengths of both the company’s Retail operation and newly christened Nook Media group. Although many of the statistics Lynch repeated weren’t new, he did tell investors that pre-orders for the new Nook HD and Nook HD+ tablets were far higher than any other device introductions and were running 240% higher than previous Nook launches. He said he was “cautiously optimistic” the new tablets will be one of the hit holiday products.
Helping to fuel sales will be the devices availability not only at B&N stores, but in Target and Wal-mart none of which will be stocking Kindle devices this holiday. Lynch said he sees B&N’s position at the three chains as a “massive opportunity” to gain market share. Longer term, international expansion is a top Nook Media priority and Lynch said he expects the Nook Bookstore to be available in 10 countries by June of 2013.
In additional to its digital assets, Nook Media includes the college bookstore division which Lynch said has seen the strongest account growth in 10 years as colleges look to outsource their bookstore’s operations in a market made more complex by the growth of digital educational materials. B&N’s e-learning initiatives will be centered around Nook Study and Lynch said announcements regarding Nook Study will be made in a few months.
As for its trade bookstores, Lynch said he expects B&N to continue to take market share in the physical book world, particularly as big box retailers shrink space devoted to print books. One statistic Lynch used that had not been public before came from a McKinsey study commissioned after Borders went out of business that found that B&N accounted for 64% of the shelf space available for print books in the country, prompting Lynch to note that B&N is “vital” to publishers.