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Barnes & Noble names head of digital division as CEO

Source: Reuters - Wed, 8 Jan 2014 22:29 GMT
Author: Reuters
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By Phil Wahba

Jan 8 (Reuters) - Barnes & Noble Inc said on Wednesday that Michael Huseby, the head of its digital division, was named chief executive, a move Wall Street interpreted to mean the bookseller still sees e-books and e-readers as a priority.

The largest U.S. bookstore chain had been without a CEO since July, when William Lynch resigned in the wake of several quarters of poor sales of Barnes & Noble's Nook e-readers and e-books business, which he developed. Last quarter, Nook division sales fell 32 percent, continuing the decline.

Huseby joined Barnes & Noble as finance chief in March 2012 and was made head of its Nook digital unit last summer.

The selection of Huseby "shows tech still a priority," said Barclays Capital analyst Alan Rifkin in the headline of a research note.

In November, he told investors that Barnes & Noble was in the device business "to stay," although the company had suggested in June it would scale back its digital business.

The company is facing declining sales in all its units, in its Nook business, its superstores and at its college stores, and Huseby has his work cut out for him, Rifkin said.

"We remain concerned around material same-store sales declines in the Retail segment, volatility in the College segment and significant losses in the NOOK segment," Rifkin wrote.

In November, Barnes & Noble estimated it had a 20 percent share of the U.S. e-books market, compared with about 27 percent in February.

Two years ago, Barnes & Noble floated the idea of splitting the company, with one entity for its digital and college business and the other for retail. The retailer abandoned those plans in August and Chairman and founder Leonard Riggio decided not to make an offer for the retail business, an idea he floated in February 2013.

Huseby has experience in spinning off businesses and overseeing mergers. Earlier in his career, he worked at AT&T Broadband and led the team that completed its merger with Comcast in 2002, and he spun off two businesses at Cablevision Systems Corp, where he was chief financial officer from 2004 to 2011.

Barnes & Noble said in a regulatory filing late Wednesday that Huseby was entitled to an annual base salary of $1.2 million. He is also eligible for a target bonus of not less than 200 percent of his annual base salary.

At the time of his hiring, Barnes & Noble touted Huseby's deal-making skills.

The bookseller is set to report its holiday sales on Thursday.

Barnes & Noble shares closed at $14.63 on the New York Stock Exchange on Wednesday.

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