Fourth-quarter net loss at US bookstore Barnes & Noble's has more than doubled to $US118.6 million as sales of e-books and devices continue to drop.
Sales in the Nook business fell 34% from a year ago, leading to the division making a loss of $US177 million.
To try to cut losses in the segment, the chain said its tablets will now be co-branded and produced in partnership with a third party manufacturer.
Shares in Barnes & Noble fell 16% on Tuesday.
Company revenue fell more than 7%.
The BBC reports the firm launched its first Nook e-reader in 2009 in an attempt to take on Amazon's Kindle in the growing e-books market.
But it has been an expensive project and sales have fallen. In the year to 27 April 2013, sales fell 16.8% and losses grew to $US475 million in the Nook division.
For the full year, Barnes & Noble said losses widened to $US154.8 million from $65.6 million.
Sales fell at its retail business, which has 675 bookstores, but its college bookstore chain provided a bright spot as revenues grew.