Barnes & Noble Education took a $12 million impairment charge in its third quarter to reflect the restructuring of its digital operations. As part of overhauling that part of its business, B&NE is closing its Yuzu digital educational platform and will replace it with a longterm agreement signed with Ingram’s VitalSource and the purchase of LoudCloud, a digital platform and analytics provider.
B&NE CEO Max Roberts said the three actions will give the company “the capabilities to offer digital products that our clients are demanding, improve our competitive position, and positively impact revenue and profitability.” B&NE expects the moves to reduce its digital spending from $26 million in fiscal 2016 to approximately $13 million in fiscal 2017. B&NE said it paid $17.9 million for LoudCloud in a deal that closed March 4.
In shuttering Yuzu, in which B&NE has invested more than $30 million, the company will close offices in California and Washington. In addition to the $12 million charge in the just-concluded third quarter, the company reported that it expects to incur restructuring charges for severance, retention, and lease terminations of $7 million to $8 million in the fiscal fourth quarter of 2016 and $1 million to $2 million in the fiscal first quarter of 2017.
In the third quarter, which ended January 30, 2016, B&NE said that revenue fell 0.6%, to $518. million, from the comparable period in fiscal 2015. The company has a net loss of $3.6 million in the period, a figure that includes the $12 million charge. In last year’s third quarter, B&NE had net income of $8.6 million.
B&NE, operator of college stores, was spun off from B&N last year.