What Does Ron Burkle See In Barnes & Noble?

Ron Bukle's fierce battle for Barnes & Noble Inc. BKS is baffling for many reasons. The biggest mystery is why he is bothering at all. Barnes & Noble's prospects are so bleak that it is hard to see what appeal it would have for anybody, especially a billionaire investor. The company's value is so buried that Ron Burkle would need an archaeological dig to find it. In the 13 weeks ended July 31, the retailer lost $62.5 million, or $1.12 per share, versus net income of $12.3 million or 21 cents, during the year earlier period. The company's cash and cash equivalents totaled approximately $27 million, according to the latest 10-K filed with the Securities & Exchange Commission. Then there are the 720 bricks-and-mortar stores, most of which are locked in long-term leases of 10 to 15 years. Odds are that these are about impossible to break. “Barnes & Noble has approximately 400 leases up for renewal by April 30, 2014, with over half of these renewals scheduled for fiscal year 2012 and fiscal year 2013,” the filing says.”If the cost of leasing existing retail stores increases, Barnes & Noble may not be able to maintain its existing store locations as leases expire. In addition, Barnes & Noble may not be able to enter into new leases on acceptable terms, or at all, or it may not be able to locate suitable alternative sites or additional sites for new retail stores in a time.” The company's online presence is dwarfed by the likes of Amazon.com Inc AMZN, whose Kindle reader has the lion's share of the e-reader business along with the Apple Inc. AAPL iPad, leaving the Barnes & Noble Nook with the scraps. Its hard to believe that Barnes & Noble was considered to be the Wal-Mart Inc. WMT of book retailing. That never happened, of course. Read the rest here.