It shouldn’t come as a surprise to anyone that Barnes & Noble(BKS) is struggling. Its stores, with their high fixed costs and high prices, have difficulty competing with online-only Amazon(AMZN). Despite years to improve its website,

shopping at bn.com is still a sterile experience that leaves even ardent bibliophiles like us cold(and prices are consistently higher than Amazon’s). The company also lowered its guidance for 2011 to expect a significant loss which was blamed on the company’s Nook business. Though the stores are still profitable, their relevance is declining daily.

Though it is currently consuming a great deal of cash, the company’s Nook business is a bright spot, growing 43% YoY. The Nook business(which includes digital content) is expected to bring in $1.5 billion in 2012 with continued rapid growth. Based on this strength the company announced that it is exploring the separation of the Nook business:

In order to capitalize on the rapid growth of the NOOK digital business, and its favorable leadership position in the expanding market for digital content, the Company has decided to pursue strategic exploratory work to separate the NOOK business. “We see substantial value in what we’ve built with our NOOK business in only two years, and we believe it’s the right time to investigate our options to unlock that value,” said William Lynch, Chief Executive Officer of Barnes & Noble. “In NOOK, we’ve established one of the world’s best retail platforms for the sale of digital copyright content. We have a large and growing installed base of millions of satisfied customers buying digital content from us, and we have a NOOK business that’s growing rapidly year-over-year and should be approximately $1.5 billion in comparable sales this fiscal year. Between continued projected growth in the U.S., and the opportunity for NOOK internationally in the next 12 months, we expect the business to continue to scale rapidly for the foreseeable future.” The Company also said that it is in discussions with strategic partners including publishers, retailers, and technology companies in international markets that may lead to expansion of the NOOK business abroad. There can be no assurance that the review of a potential separation of the NOOK digital business will result in a separation. There is no timetable for the review, and the Company does not intend to comment further regarding the review, unless and until a decision is made.

It’s not clear yet whether this will lead to a spin off to shareholders, but we’ll continue to follow this story. This is not the first time that Barnes & Noble has pursued a strategy like this. Some may remember that bn.com was an independent company that Barnes & Noble bought back after the internet bubble burst in 2000. Barnes & Noble is down strongly on the announcement, primarily based on the projected loss for 2012. But if Nook’s sales can follow the path projected, it alone may be worth more than Barnes & Noble’s current market cap.

UPDATE: As @TMTanalyst pointed out John Malone’s Liberty Media(LMCA) had offered to buy Barnes & Noble last year and took a minority stake. This potential spin off very much smells like Malone.

Disclosure: The author holds no position in any stock mentioned, though he does spend way too much on books and at AMZN

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