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Barnes & Noble’s net loss more than doubles; stock slides

Barnes & Noble poured money into Nook e-readers to fend off rivals; the strategy has not worked.

Jae C. Hong/Associated Press/File 2013

Barnes & Noble poured money into Nook e-readers to fend off rivals; the strategy has not worked.

NEW YORK — Sales plummeted at Barnes & Noble bookstores in the latest quarter and its Nook e-book devices failed to keep up with competitors, pushing the company to a net loss that more than doubled from a year earlier.

The largest traditional US bookseller said Tuesday that it will stop making its own Nook color touchscreen tablets, a move intended to stem the losses it’s suffering at its digital unit.

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It said it will continue to make its more basic, black-and-white e-readers but farm out the tablet manufacturing to a third party.

‘‘We know this is a sizable change from our existing strategy,’’ chief executive William Lynch said. He declined to give specifics on how the tablet partnership would work because the company is in discussions with ‘‘a lot of interested parties.’’

The about-face troubled investors, who sent Barnes & Noble’s stock down more than 17 percent to $15.61.

Barnes & Noble Inc. had been pouring money into developing its Nook devices to keep up with changing reading habits and beat back competition from retailers such as Amazon.com, which makes the popular Kindle readers.

It has not worked. According to the research firm IDC, Barnes & Noble’s tablet shipments fell to 1 million in the fourth quarter, down from 1.4 million a year earlier. Sales of Kindle e-readers have kept growing.

Michael Norris, senior analyst at Simba Information, said Barnes & Noble did not differentiate its product aggressively enough.

At an analyst presentation, for example, he noted that Barnes & Noble had Kindle devices on hand to demonstrate how much lighter its Nooks are. But it failed to do that in stores for customers, he said.

And the company did not have as much money to spend on advertising as its rivals.

‘‘It’s kind of unfortunate,’’ Norris said of the decision to outsource tablets but continue making e-readers. ‘‘They’re getting out of the hardware business that has the most potential and hanging onto the business that has the least.’’

For the quarter, the company booked inventory and impairment charges for its Nook unit. It said it sold fewer devices and that sales of digital content for the readers fell 9 percent. It blamed the decline of e-book sales partly on the tough comparison from a year earlier, when ‘‘The Hunger Games’’ and ‘‘Fifty Shades of Grey’’ trilogies boosted results.

In the broader e-book market from the largest publishers, Barnes & Noble has said it has about 25 percent of content sales. But it admitted that figure has been under pressure from Apple Inc. and Amazon lately.

‘‘We’re holding our own, but it’s declined slightly,’’ said Michael Huseby, chief financial officer.

Meanwhile, its bookstores also saw sales decline. Revenue at stores open at least a year, a key metric, fell 8.8 percent during the period.

It also warned it expects that figure to decline in the ‘‘high-single digits’’ for its fiscal 2014.

Overall retail sales, which include Barnes & Noble bookstores and online sales, declined 10 percent, in part because of store closings.

Barnes & Noble declined to provide an update on the possibility of taking the retail business private. Leonard Riggio, the founder of Barnes & Noble, has offered to buy the company’s physical bookstores and website, but not the Nook unit.

The company also said it’s reviewing previous financial statements that may result in a revision.

For the February-to-April quarter, Barnes & Noble Inc. said its net loss totaled $118.6 million, or $2.11 per share. That compares with a loss of $56.9 million, or $1.06 per share, last year.

Revenue fell 7 percent to $1.28 billion.

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