In breaking financial news, Barnes & Noble, Inc. (NYSE:BKS) said today that its board has authorized the bookselling giant to split its retail and Nook divisions into two separate public companies. The statement said the company plans to complete the split by the end of the first quarter of next year.

Barnes & Noble

Barnes & Noble Inc. also reported its fourth-quarter loss narrowed, but the performance still missed Wall Street’s expectations.

The Nook fiasco

Barnes & Noble, Inc. (NYSE:BKS) has been losing sales and retrenching its business model for some years now. Analysts point out that Barnes & Noble, Inc. (NYSE:BKS) has been trying to reinvent itself as competition from discount bookstores and online retailers heats up, and most importantly, as readers move away from traditional books to digital books.

The firm’s Nook e-book device has seen very limited success and has become a second sister in the e-reader market. The Nook was B&N’s big push to compete with Amazon.com’s in the e-book market, and its failure has been a major setback for the company.

William Lynch, who was a major supporter of the Nook, resigned as CEO last year. The company named Michael P. Huseby as new CEO early this year.

The company also reported that for the latest quarter, the Nook division suffered a 22% revenue decline to a mere $87 million.

Next step in Barnes & Noble’s turnaround efforts

Consensus analyst opinions seems to be that Barnes & Noble, Inc. (NYSE:BKS)’s split into two separate businesses was really no surprise, and was clearly the right move for the company. The New York-based retail icon, which announced earlier this month that it was teaming with Samsung to develop Nook tablets.

In its Wednesday earnings report, Barnes & Noble also reported its fourth-quarter loss shrank significantly, but the number was still somewhat below consensus Wall Street expectations.

B&N stock up on the news

Barnes & Noble, Inc. (NYSE:BKS) shares are reacting positively to the news of the split. Shares if the firm were trading up more than 8% in premarket trading on Wednesday.