What: Shares of retailer Barnes & Noble, Inc. (NYSE:BKS) are down 11.5% at 1:17 p.m. EDT on August 17, after the company issued a press release late on the 16th, announcing the departure of CEO Ronald Boire. Boire will leave the company after less than one year on the job, having taken over as CEO in September of 2015.
So what: Here's the statement from Barnes & Noble:
The Board of Directors determined that Mr. Boire was not a good fit for the organization and that it was in the best interests of all parties for him to leave the Company. The Company also said that its Executive Chairman, Leonard Riggio, who was scheduled to retire at the close of the Company's Annual Meeting on September 14, will postpone his retirement until a later date.
The Company will immediately begin an executive search for a new CEO. Mr. Riggio, along with other members of the executive management team, will assume Mr. Boire's duties. The Company will continue to execute on its previously announced strategic initiatives.
Now what: While sales were nearly flat over the past year, the pressure on the retail bookseller to reinvent itself isn't going away. There remains demand for printed books, but online competition will continue to weaken that business, while digital books continue to make the printed books pie less and less meaningful. Combined, it's hard to look into the future and see Barnes & Noble having a sustained path forward as the business exists today.
There are plans under way to reinvent the company, including testing new concepts, including restaurants with expanded menus, including beer & wine, in an effort to increase traffic and consumer interest. Maybe that works. Maybe not.
But here's the bottom line: The company has a core business that is being disrupted by online retail, just like nearly every retail business, and that business is built on selling a product that's also being disrupted by technology. And it just fired its CEO after less than one year.
There are few things to like about Barnes & Noble as an investment right now, and a lot of reasons things could only get worse from here.