Analysts tepid on Barnes & Noble e-bookstore

PORTLAND, Ore. — Shares in Barnes & Noble Inc. slipped Tuesday as the bookseller’s plans for a new electronic bookstore received a tepid response from investors and analysts.

Barnes & Noble announced late Monday that it is launching an electronic bookstore that will allow customers to buy books to be read on a variety of handheld devices and computers. The move is seen as a challenge to competitors like Amazon.com Inc., which has led the e-book market with its support of the Kindle reader.

Industry experts said Barnes & Noble is wise to focus on an array of platforms, rather than dedicated e-reader devices as competitors have.

But analysts were lukewarm to the news Tuesday — saying the electronic book market is too small to make a marked difference in the bottom line of the struggling retailer.

Stifel Nicolaus & Co. analyst David Schick said Barnes & Noble remains the leader in a difficult market and the e-book business is promising, but overall the move “will not stem the tide of general pressure” on the retailer.

Barnes & Noble has seen its sales slip for some time as it loses business to discounters like Amazon, Target Corp. and Wal-Mart Stores Inc. The recession has compounded those problems as consumers cut back on discretionary spending.

Standard & Poor’s equity analyst Michael Souers said he does not expect the electronic book business to have a major impact on earnings in the medium term. Souers said he sees Barnes & Noble shares as overpriced and maintains a “strong sell” rating on the retailer.

Shares of Barnes & Noble fell 70 cents, or more than 3 percent, to $21.41 in afternoon trading.