Bad news times two for Barnes & Noble

What with a disappointing report on earnings (they’re falling) and the disclosure that founder Len Riggio is ceasing his effort to take over the company’s brick-and-mortar stores, things are not looking good for Barnes & Noble.

And yes, Chief Executive William Lynch did resign in July, taking a severance of $3.65 million in cash and $5 million in stock.

What’s going on? Oh, it’s the poor Nook again.

Monday’s earnings report shows that for its first fiscal quarter, Barnes & Noble’s Nook experienced “a huge loss,” according to USA Today. Revenue was down more than 20%, with sales of the e-reader itself and e-book sales slumping.

In June, trying to stanch the bleeding, Barnes & Noble announced it would stop producing its Nook color tablet. It will work with third-party partners to manufacture tablets instead.

Barnes & Noble’s efforts to join the e-book revolution do not seem to be working.

Meanwhile, Riggio announced that he would not follow through on his effort to make a bid for the company’s 675 brick-and-mortar retail stores. “While I reserve the right to pursue an offer in the future, I believe it is in the company’s best interests to focus on the business at hand,” Riggio said in a statement.

Such a move would have separated the retail business from the e-book and e-reader business. This sort of division had been underway: In 2012, Barnes & Noble spun off its Nook unit into a new subsidiary with the help of a $300-million investment from Microsoft (which got a 17.6% share of the division in return).

Riggio’s announcement seems to have reversed those plans. “There are no imminent plans to pursue some kind of separation of the business,” Barnes & Noble President Michael Huseby told the Wall Street Journal.

What does all this means for Barnes & Noble? Investors think it’s bad news: On Tuesday, the company’s stock price fell as much as 17%.

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