Barnes and Noble suspends dividends as profits fall by a quarter

Nook - eReader by Barnes and Nobles

Nook – eReader by Barnes and Nobles

The largest US bookseller posted dismal profits to the end of January as it continues to invest heavily on its e-book strategy.

Net profit slumped to $60.6 million (£37.6 million), a drop of 25% from $80.4 million reported last year over the same period. The company has temporarily suspended its dividend payments.

The company’s main rival bookstore operator Borders had filed for bankruptcy protection amid declining sales.

Barnes and Nobles said it will not issue any revenue or profit forecasts for the quarter. The company has heavily invested in its Nook e-book reader to take on rival and market leader Amazon’s Kindle.

“We intend for Barnes & Noble to be a leader in the exploding market for digital content”, said William Lynch – the group’s chief executive.

Both Barnes and Noble and Borders have been badly hit by competition from supermarkets and online sales and is trying to revive their fortune in the e-content space.

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