Dive Brief:

• Barnes and Noble Thursday reported Q3 same-store stores rose 1.3%, excluding its faltering Nook e-reader and e-book business. The retailer suffered continued fallout from a botched mid-2015 relaunch of its website, however, and as a consequence lost 1.8% in Q3 web sales, to $1.4 billion.

• The Nook, which Barnes and Noble can’t kill outright due to the extreme loyalty of its few fans, continues to die on its own nevertheless. Nook sales were down 33.3% to $51.7 million on slower sales of both devices and content. The Nook’s U.K. business is folding up entirely, with Nook content sales ending May 31.

• The retailer said it would close eight stores—its smallest store closure number in 15 years, which is especially good news considering that in June it had projected 13 closures this year.

Dive Insight:

New Barnes & Noble CEO Ron Boire has taken steps to diversify the retailer's offerings to include toys, games, music and small home goods, with sales rising 12.5% in those categories.

Boire has expressed a personal affinity for physical books, and Barnes and Noble’s endurance in the category may be paying off, considering that sales of physical books, particularly paperbacks, are rebounding as e-book prices have risen. Given equal or close prices, physical books appear to win over digital ones. 

In fact, it’s been a fairly even swap, according to data from the Association of American Publishers. Overall U.S. e-book sales in the first three quarters of 2015 fell 11.1%, while paperback sales grew 13.3% and hardcover sales fell 6.4%, according to the AAP. Notably, Barnes and Noble and other booksellers still face competition from digital book sales in the form of audiobooks, which saw U.S. sales rise 37.7% in that same period. 

Despite the closure of its U.K. Nook business, Barnes & Noble appears to sticking by the Nook platform for now, though its website and stores are a priority, Boire said Thursday. 

“We are pleased with our bookstore sales performance and the reduction of Nook losses during the fiscal third quarter,” Boire said in a statement. “We remain committed to providing a great digital reading experience to our customers, while exploring all opportunities to further reduce losses. Moving forward, our top priorities are growing bookstore and online sales, reducing retail and Nook expenses and growing our membership base.”

Barnes & Noble also said it will open four new concept stores during fiscal 2017. Details are scarce, but Publishers Weekly noted the company is developing new prototype stores inspired by what Boire called his "omni-channel" approach to retailing, leveraging brick-and-mortar stores to drive customers to make purchases online.

"I don’t think until you’re fully connected–mobile, desktop and store–that you’re going to be providing the full experience," Boire told attendees at last month's eTail West conference. "That’s our goal.”