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Founder drops buyout plan after Nook drags down Barnes & Noble Q1 financials

Barnes & Noble founder Leonard Riggio has had a change of heart and no longer wants to purchase the company's retail business.

"While I reserve the right to pursue an offer in the future, I believe it is in the company's best interests to focus on the business at hand," Riggio said in a regulatory filing.

"Right now our priority should be to serve the more than 10 million customers who own Nook devices, to concentrate on building our retail business, and to accelerate the sale of Nook products in our stores, and in the marketplace," he added.

In late February, Riggio — the chain's founder, largest stockholder, and chairman of the company's board — disclosed plans to buy the Barnes & Noble Booksellers brick-and-mortar business and He was not, however, interested in the Nook Media eBook, e-reader, and tablet division.

Since then, Barnes & Noble announced that it is looking to hand its struggling Nook tablet division off to a third party.

More recently, director and CEO William Lynch resigned, leaving Michael P Huseby in charge — and Barnes & Noble has recorded a greater-than-expected fiscal first-quarter loss.

According to its freshly-announced financials, first-quarter consolidated revenues decreased 8.5 per cent to $1.3 billion (£830 million), retail revenue dropped 9.9 per cent, while the Nook division took a 20.2 per cent hit over last year.

"Our top priority in our operating strategy is to increase all categories of our content revenue," Huseby said in a statement. "We are working on innovative ways to sell content to our existing customers and are exploring new markets we can serve successfully."

Barnes & Noble has blamed its poor first-quarter showing on a lack of popular series, like The Hunger Games or Fifty Shades of Grey, both of which gave the bookseller a strong boost last year to both its retail and Nook departments.

But hope is not lost, according to Huseby, who promised that the company "intends to continue to design and develop cutting-edge" Nook devices. In fact, at least one new Nook will be released for the upcoming holiday season, he said, adding that further products are in development.

Speculation about a new Nook device cropped up over the weekend, when Barnes & Noble announced plans to drop the price of its Nook Simple Touch with Glowlight to a cool $99 (£63).

Barnes & Noble has also boosted its Nook Video service, this week launching free apps for iOS, Android, and Roku that allow users to stream movies and TV shows onto their device. The retailer also released native Nook Video apps for the Nook Tablet and Nook Color.