The Barnes & Noble board of directors has given its approval to separate the entity into two public companies with one holding the retail trade stores and the other holding its Nook operations plus the college bookstores. The hope is to complete the transactions by the first quarter of 2015, although B&N noted that there is no assurance such a division will be successful.

The separation of the two businesses has been called for by a number of analysts and other industry observers. Unlike just a few years ago, however, the hurdle in dividing the company is likely to be Nook Media, which has struggled as sales of hardware and digital content have fallen. The declines could make it difficult for investors to back an offering.

The announcement of the potential split came as B&N announced results for the full year ended May 3, 2014. Total sales for the year fell 6.7%, to $6.38 billion, but EBITDA improved to $251.0 million from $7.1 million in fiscal 2013.

Although B&N has substantially reduced the losses in the Nook division, the unit still had negative EBITDA of $217.6 million in the year, down from $480.4 million in fiscal 2013. Sales dropped 35.2%, to $505.9 million. The revenue decline was due to drops in both hardware sales—down 44.8% in the year to $260 million—and digital content sales—which fell 20.6% to $246 million. The company has dramatically cut back its financial commitment to the hardware business and earlier this month reached an agreement with Samsung for the technology company to develop a color tablet that will link to the Nook content store. The second part of Nook Media, the college stores, had a 2.8% increase in EBITDA, to $114.6 million, and revenue dipped 0.9%, to $1.75 billion. Combined into one company the two would have an EBITDA loss of $103 million on sales of $2.2 billion.

The retail trade business, which includes, finished the year with EBITDA of $354.1 million, down 5.9%. Sales fell 6%, to $4.29 billion. The division finished the year on a relatively strong note with fourth-quarter revenue up 0.8%, to $955.6 million, while EBITDA slipped 0.8%, to $53.1 million. For the full year, comp store sales were down 5.8%. Excluding sales of Nook product “core” comp sales fell 3.1%. Revenue for the unit for the entire year was also negatively impacted by lower online sales and store closures. During the year, B&N opened three trade stores and closed 17 finishing the year with 661 outlets; it has no plans to open any new trade stores and expects to close about 20.

Retail CEO Mitchell Klipper attributed the improving core trends in the last few quarters to a better selection of books and the ability of B&N booksellers to improve their discoverability. Sales of toys & games rose by 11.7% in the year and B&N is holding more events to attract customers to the the department. Klipper also expects the August release of the customized Samsung table to bring in customers; much as it has done when selling Nook hardware, B&N will devote prime retail space to sell the new devices.

In a prepared statement, B&N CEO Mike Huseby noted that if the company is successful in separating, “we fully expect that our Retail and Nook Media businesses will continue to have long-term, successful business relationships.”

Looking ahead to fiscal 2015, B&N said it expects comp store sales to fall in low single-digits for both the retail trade and college bookstore businesses, while at the same time expecting the EBITDA loss to decline. As evidence about where B&N business is going, executives said of the $140 million in planned corporate expenditures for fiscal 2015, $65 million will go to Retail, $50 million to College, and $30 million to Nook.