Its expertise lies in the genteel world of novels, poetry and college textbooks. But America's biggest high-street bookseller, Barnes & Noble, is embroiled in a bitter fight to stave off threats from upstart electronic reading devices, discount online retailers and a maverick billionaire with aggressive intentions.
The 720-strong chain is engaged in a fierce courtroom confrontation with Ron Burkle, a private equity tycoon whose Yucaipa investment vehicle has built a 19% stake in B&N and who is challenging a "poison pill" provision hastily created by the company to halt his advance up its shareholder register.
Burkle has hinted he wants to put up potential directors for election to shake up the board of the company, which recently warned of weak earnings as it pumps resources into creating digital offerings to compete with the likes of Amazon's Kindle and Apple's iPad. But the Riggio family, which has steered the firm since the 1970s, is determined to hang on.
In a trial in Delaware that began last Thursday, Burkle objected to a new provision preventing investors from buying more than 20% of B&N without boardroom approval: "We are sitting in a company [where] we think the rules are kind of unfair and unclear." Under the poison pill, a single shareholder's accumulation of a fifth of the company would trigger rights for other investors to buy newly issued stock, effectively diluting and devaluing shares. B&N says the scheme is "intended to protect our shareholders" from hostile opportunists.
In the literary world, B&N is an institution feared and respected in equal measure. Beneath its familiar green logo, the company sells 300m books annually and 60m drinks at in-house coffee shops. Loathed by independent competitors, it has dramatically expanded under chairman Leonard Riggio's control from a flagship store on New York's Fifth Avenue to megastores in almost every major US city. However B&N has struggled to cope with deep discounting of books by the likes of Wal-Mart and Amazon, plus a shift towards digital reading devices that has aggravated a long-term decline in the popularity of books.
David Schick, a retail analyst at stockbroker Stifel Nicolaus, said bookshops had acted like "Premiership football teams trying to beat each other when, suddenly, American football invades England and everybody becomes focused on a different game". In November, B&N introduced its own electronic reader, the Nook, based on Google's Android operating platform. In a signal of its intention to go hi-tech, B&N appointed William Lynch, a former boss of its digital division, as its chief executive this year, taking over day-to-day management from Riggio.
Yet critics say B&N was late on the electronic uptake and that longer-term social trends are apparent as television and internet browsing compete with books for the public's "media time". Schick said: "The wind has been in the face of book consumption for a lot longer than e-readers and the internet have been around."
Burkle's precise intentions are deliberately blurred. Originally a supermarket magnate, the financier, friend of former president Bill Clinton, has built a fortune estimated by Forbes magazine at $3.2bn (£2.1bn) through aggressive stake-building in undervalued public companies.
His recent investment targets have included American Apparel and organic foodstuff chain Whole Foods Market.
The corporate raider has argued B&N was wrong to splash out $514m last year on a chain of 620 college bookstores from its own chairman. Yucaipa accuses Riggio of using the firm as a "personal piggy bank" and contends the transaction was at an above-market price.
"He wants to gain a greater activist role so he can steer strategic decisions and try to make the company more profitable," says Michael Souers, a retail equity analyst at Standard & Poor's, who adds Burkle has talked of alliances with the likes of Hewlett-Packard and Microsoft to make B&N more competitive in the digital era.
The Riggio family have won plaudits on Wall Street over the years for building B&N's brand, striking a deal with Starbucks to sell coffee in stores, and for customer loyalty and membership schemes. Its present difficulties are hardly unique: Borders was recently obliged to refinance its debt to stave off bankruptcy.
But even though it is the market leader, B&N's stock has fallen 32% over the last 12 months while its profits slumped 52% last year to $36.7m.
"They were a little bit late in their realisation that ebooks were the future," says Souers, who sees further future decline in bricks-and-mortar bookstores. "They probably believed that physical books would remain vastly dominant for years and years to come."
