Business

Barnes & Noble shares fall after boss sacked

Barnes & Noble store Image copyright Getty Images

US bookstore chain Barnes & Noble has sacked its chief executive Ronald Boire after less than one year on the job, sending its share price falling.

The company's share price fell more than 13% to an eight-month low.

The board said that Mr Boire, who was only appointed in September 2015, was "not a good fit".

Barnes & Noble has struggled to maintain its hold in the US market amid new technology and stiff competition from Amazon.

In a statement, Barnes & Noble said: "The board of directors determined that Mr Boire was not a good fit for the organisation and that it was in the best interests of all parties for him to leave the company".

'Major surprise'

Leonard Riggio, the company's executive chairman and one of its founders, will fill in while Barnes & Noble looks for a full-time replacement.

Mr Riggio was scheduled to retire but will remain with the company until a new leader is found.

The company said it would begin its search for a new chief executive immediately.

"This [ousting of Mr Boire] was a major surprise," said John Tinker, senior research analyst at Gabelli & Company. He said the new chief executive would need a wide set of skills to manage the changes facing Barnes & Noble.

In June, Mr Boire held a meeting with shareholders in which he laid out the company's strategic plan for the next few years - including new store concepts with expanded restaurants with waiter service.

"It's a tricky role," said Mr Tinker, "you're a retailer but you have to have a digital strategy for competing against Amazon, you have to understand consumers trends and now with the restaurants, you'll need to understand that that industry."

Market struggles

The departure of Mr Boire has raised questions about the company's ability to manage the challenges facing the business.

Over the last two years, Barnes & Noble's sales have fallen as it loses out to lower prices from rivals such as Amazon.

Amazon's Kindle e-reader has also outperformed Barnes & Noble's Nook, which the company is phasing out due to its poor performance.

Sales for the Nook, both the content and device itself, dropped 27.4% in the 2016 fiscal year, which ended in April.

Barnes & Noble operates 640 stores in the US. At its peak in the early 2000s there were around 800.

Once a new boss is found, Barnes & Noble will have had five chief executives in just four years.

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