New Barnes & Noble CEO calls digital books ‘the key to our future’

Book giant Barnes & Noble Inc., in the midst of a heated stock ownership battle with Los Angeles billionaire investor Ron Burkle, has announced a major shake-up of its top management.

The world’s largest bookseller said Thursday that it was replacing Chief Executive Steve Riggio with William Lynch, the head of its online division, in a move many saw as a sign that the company was embracing the changing nature of the book business.

“It’s a technology person running a bookstore, and that’s a big deal,” said David Schick, an analyst at Stifel, Nicolaus & Co. “They don’t have their head in the sand about what’s going on out there. I think that’s the single biggest take-away.”

Lynch, 39, joined the bookseller in February 2009 as president of Barnes & Noble.com. He succeeds Riggio, who had been chief executive of the company since 2002 and is the younger brother of Chairman Leonard Riggio.

The move comes at a difficult time for Barnes & Noble. The New York company has seen its store sales decline as customers migrate online, and analysts have openly cast doubts on the company’s direction as the book industry goes more digital.

It has also weathered criticism about its management from Burkle, who has been aggressively buying the company’s stock since late last year. The investor recently slammed Barnes & Noble’s board of directors for rebuffing his attempts to raise his stake to as much as 37%, which would make him the company’s largest shareholder.

In an interview with The Times this month, Lynch said he was confident that Barnes & Noble’s wide reach -- 719 bookstores in 50 states, plus college, online and publishing divisions -- would allow it to succeed in the evolving book business.

He stressed that he still saw a place for brick-and-mortar stores despite the rise of online sellers and digital e-readers such as Amazon.com Inc.’s Kindle device and his company’s own Nook.

“In terms of where the business exists, physical books and bookstores will continue to be a very important part of this big industry,” he said.

Lynch reiterated that sentiment during a conference call Thursday with analysts, but also called e-books and digital products “the key to our future.”

“Barnes & Noble is very well positioned in this world, and we are taking the bold action that will be necessary to win,” he said.

Steve Riggio, 55, will remain vice chairman and still be actively involved in Barnes & Noble, the company said. The bookseller also announced the promotion of Chief Operating Officer Mitchell Klipper, 52, to chief executive of its retail group, which includes the Barnes & Noble retail business and the Barnes & Noble College Booksellers business.

In Thursday’s conference call, Leonard Riggio said the management changes were important steps to “securing the company’s future” and said it was “unquestionably the right time to make this transition.”

“We’ve always been concerned with the continuity of our enterprise,” he said. “From the outset, this business has not been about us but about all the stockholders of Barnes & Noble. . . . We’ve always been committed to retail, and now we want to be equally committed to the other parts of our business.”

Shares of Barnes & Noble rose 57 cents, or 2.6%, to $22.90.

Leonard Riggio bought Barnes & Noble as a single bookstore in 1971 and is often credited with creating the modern bookstore model.

The company changed the face of book retailing in the 1990s with its aggressive rollout of hundreds of superstores nationwide. Today Barnes & Noble sells about 300 million books a year and accounts for roughly 18% of U.S. book sales.

Schick, of Stifel, Nicolaus & Co., said Barnes & Noble was wise to change its management and put digital technology front and center.

“To ignore the way the printed word is developing would be just way too dangerous,” he said. “You have to move fast when digitization starts.”

andrea.chang@latimes.com