Barnes & Noble changed CEOs Thursday, elevating the president of its Web site to lead the company, a surprise move that highlights the importance of digital books to the bookseller's future.
The company said former CEO Steve Riggio will stay on as vice chairman and be actively involved with the company.
New CEO William Lynch helped launch the company's electronic book store and oversaw the introduction of its electronic book reader, the Nook. The company is counting on the technology on to boost sales and ward off intense competition from online retailers, discount stores and rival e-readers such as Amazon.com's Kindle.
The impending launch of Apple's Ipad tablet computer is also crowding the e-reader field. Barnes & Noble, which offers its e-reader software across a host of platforms including laptops and most mobile devices, said last week it will also make it compatible with the Ipad.
Lynch, 39, has served as president of Barnes & Noble's Web site since February 2009.
"In just a year, he has put our e-commerce business back on its fast-growth track and has helped us quickly establish the company as a major player in the rapidly growing e-book and digital content arena, securing important partnerships with major technology companies," Steve Riggio said of his successor in a call with analysts.
Lynch said he will work to develop both retail and online businesses.
"Although the stores will be just a part of the offering, they will remain a key driver of sales as we expand our multichannel relationships with our customers," he said during the call.
Barnes & Noble is under pressure from shareholders as sales at its stores flag. Los Angeles billionaire Ron Burkle has blamed company management.
In February, Barnes & Noble blocked an attempt by Burkle, whose Yucaipa Cos. holds a 19 percent stake in the company, to amass more shares.
Steve Riggio is the brother of Leonard Riggio, the company's biggest shareholder.
The company also promoted Chief Operating Officer Mitchell Klipper, 52, to CEO of its retail group, which includes Barnes & Noble stores as well as its college bookstores.
Last month Barnes & Noble, based in New York, said the launch of the Nook helped spur online sales, which rose 32 percent, but weakness at its bookstores led to a drop in profit during the third quarter.
Its outlook for the beginning of this year left many investors disappointed.
Before joining Barnes & Noble, Lynch was executive vice president of marketing at home shopping network HSN Inc. and general manager of HSN.com. He also served as CEO and co-founder of Gifts.com, a subsidiary of IAC.
Michael Norris, senior trade analyst at Simba Information, said that while it was apparent Lynch was being groomed for a larger role since joining the company, he was surprised the shift happened so soon.
"It's pretty clear that they're putting all of their chips on the (digital) side," Norris said. "I hope that Lynch maintains the understanding that a huge part of Barnes & Noble's value proposition is their commitment to the superstore format. There's been so much excitement over the digital side of things a lot of people forget most people buy old-fashioned print books and are not yet committed to e-books."
Barnes & Noble is not the only bookseller with changes at the top. In January, Borders Group CEO Ron Marshall left that company after just a year to join A&P's parent, Great Atlantic and Pacific Co. He was Borders' third CEO to leave in five years. The company has not named a permanent replacement yet.
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