Barnes & Noble to outsource manufacturing of Nook color tablets

  • Los Angeles Times
  • Tuesday, June 25, 2013 1:36pm
  • Business

Barnes &Noble announced its exit from the tablet manufacturing business Tuesday, blaming its line of Nook color-screen tablets for poor annual earnings.

Barnes &Noble said future Nook color-screen tablets will be co-branded with third-party manufacturers it has not yet announced.

The book retailer said a 16.8 percent drop in sales of all Nook devices – including its black-and-white e-readers – for the 2013 fiscal year was a big reason for the company’s overall fiscal year revenue being down more than 4 percent to $6.8 billion.

The New York City-based company said its unsold inventory of Nooks was key to company losses of nearly $155 million for the year, nearly 136 percent higher than net losses posted for fiscal year 2012.

The company said the Nook units’ losses before interest, taxes and some non-cash costs were $475 million for the year, up from $262 million in losses in 2012.

“We are taking big steps to reduce the losses in the Nook segment, as we move to a partner-centric model in tablets and reduce overhead costs,” company CEO William Lynch said in a statement.

The company said it will continue to make black-and-white e-reader devices, however, and continue to expand offerings in its online store, which saw sales increase 16.2 percent on the year.

Barnes &Noble also said it will offer the color-screen Nook HD and Nook HD Plus models it has on hand “at amazing prices through the holiday.”

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