NEW BRUNSWICK, NJ–The city’s new Barnes & Noble (B&N) Rutgers University superstore on Somerset Street may soon be part of a different company than the original B&N retail locations.
Barnes & Noble, Inc. announced on February 26 plans to spin off its college bookstore business unit from its B&N’s retail, online, and “Nook Digital” businesses.
The retail business, which includes 649 stores in 50 states, has reportedly stabilized. On the marketing end, B&N has been organizing a growing number of in-store events to drive traffic to those retail locations.
But the college book unit, which manages 714 stores on college campuses in the United States, has 65 more stores than the traditional retail unit.
When the separation is completed, by the end of August, it will create two, independent, publicly traded companies.
“Separating Barnes & Noble Education will create an industry-leading, pure-play public company with more flexibility to pursue strategic opportunities in the growing educational services markets,” said Michael Huseby, B&N’s CEO, in a statement.
The new company, Barnes & Noble Education, will be based in Basking Ridge. The separation is intended to be a tax-free distribution to B&N shareholders, according to the company.
“What this does is create a pure play for investors interested in the college market,” analyst John Tinker told the Wall Street Journal.
A search of the company’s website for locations near New Brunswick does not list the Somerset Street location, which is operated as part of an agreement with Rutgers.
Instead, the site directs customers to its three other Middlesex County locations, including North Brunswick’s store on Route 1, and locations in Edison’s Menlo Park Mall and East Brunswick’s Brunswick Square Mall.
A security filing said the college bookstore unit will be seeking growth through acquisitions or mergers, and would like to both raise capital and form strategic alliances.
New Brunswick Development Corporation (DEVCO), the company that built the New Brunswick location as part of the city’s tallest skyscraper, referred questions about the impact of the corporate split to Rutgers.
A spokesperson for Rutgers University did not immediately respond to an emailed question from NBToday.
Last June B&N said it would separate the Nook business from the retail business; however, now the company says Nook will become part of the retail business.
Due to its poor performance, B&N reportedly had trouble separating Nook from the original company (which includes BarnesandNoble.com). The unit suffered a 55% revenue decline during the holiday season making it difficult for B&N to sell its value to investors, according to analysts.