Activist investor Thomas Sandell, CEO of Sandell Asset Management Corp., recently urged the board of directors of Barnes & Noble to sell the company, according to the Wall Street Journal. Despite the recent struggles of brick-and-mortar bookstores in the U.S., Sandell acknowledged the potential of Barnes & Noble as the last remaining national chain of bookstores.
Sandell compared Barnes & Noble’s real estate to “beachfront property,” that can provide value to an Internet or media company looking to expand its presence in retail. However, the investor does not believe Barnes & Noble can continue to operate effectively as a stand-alone public company. Additional investment or new management would be required to revitalize the company.
Barnes & Noble has struggled to compete with Amazon, the online leader in book sales. Over the past several years, the retailer has explored numerous possible deals, including a buyout attempt by its chairman, Leonard Riggio, but none of the plans came to fruition. In the last year, the retailer’s stock was down more than 30% and its revenue declined 6.5% to $3.9 billion.
Sandell and his company — one of Barnes & Noble’s 10 biggest investors — have recently increased their stake in the retailer. He believes the bookstore can attract a bid of more than $12 a share, compared with its closing price on July 24, 2017 of $7.10.
“Physical books, and physical bookstores, are not going away anytime soon,” said Sandell in a statement. “What makes the under-valuation of Barnes & Noble all the more shocking is that, as opposed to the numerous other national apparel, footwear, grocery and home furnishing chains abounding in this country, there is but one truly national bookstore chain.”