In a surprise twist I certainly didn’t see coming, Barnes and Noble’s new owners may have taken the only action that might just save the teetering brick and mortar bookseller chain from oblivion.
In 2018, it seemed like the days of the United States’ last major bookstore chain were numbered. A decade of falling sales, brutal layoffs, 150 store closures, six chief executives, and a $1 billion loss on its Nook e-reader had left Barnes & Noble in the throes of an identity crisis.
A crisis that few corporations, let alone corporations in competition with Amazon, manage to survive.
Everyone expected the hedge fund that bought B&N a few months back to strip out and sell the copper pipes and wires then burn the place down for the insurance. But Elliot Advisors seem to be playing against type by naming James Daunt the beleaguered chain’s new CEO.
A 55-year-old Englishman, Daunt has spent nearly three decades in the bookselling business. For most of that time, he was exclusively Team Indie, overseeing an idyllic, boutique book-buying experience as the founder of Daunt Books, which has six locations in well-heeled neighborhoods in London.
Despite his small-business bona fides, Daunt has in the past decade emerged as an unlikely savior for big-box bookstores, first overseeing the revival of Waterstones, a UK chain with close to 300 branches, and now at Barnes & Noble. His turnaround strategy is centered on a simple premise: In a world where Amazon offers unbeatable convenience and prices, big book chains will only survive if they act more like independents.
You may want to screencap that excerpt, because it isn’t just a block of text. It is a unicorn. Chances are, you’ll never again see a big corporation not obstinately doubling down on ruinous stupidity.
B&N has, against all odds, come up with the right answer. Oldpub’s consignment-based lumber mongering business model is dead. It’s just not broke yet, though following it was just about to land B&N in bankruptcy.
Now the company is steering away from the cliff by adopting a superior, viable business model.
America’s biggest box book store is going indie.
Why not? It worked when Daunt ran Waterstones.
Daunt’s changes eventually paid off. In 2016, Waterstones turned a profit for the first time in eight years. In 2017, annual profits rose 80% over the year before, and in 2018 it was sold to Elliot Advisors. The turnaround was all the more remarkable because Daunt essentially convinced Waterstones to think locally—a reversal of the usual formula for success in big retail stores.
If your formula’s not working–change it. How novel!
The UK consensus is that Daunt brought Waterstones back from the brink. Now Elliot Advisers is hoping he can do the same for Barnes & Noble. B&N operates at a much larger scale than Waterstones, with 627 locations, and its stores take up more square footage. Nonetheless, Daunt sees clear parallels between the two chains. As with Waterstones, he thinks this turnaround should start with giving booksellers autonomy over what they sell and display.
“That strategy has worked well for Waterstones, and it could work for B&N, which in its heyday gave some autonomy to regional and store managers and had regional buyers,” says John Mutter, editor in chief of Shelf Awareness. “Unfortunately in cost-cutting moves, buying has been centralized and made less personal, and most display ‘ideas’ come from headquarters. It’s one of many reasons that the company has had problems.”
The takeaway: Daunt plans to do what he did successfully at Waterstones–run Barnes and Noble as a series of indie book shops. It’s a bold move, but less so than you’d imagine. Indie bookstores have actually enjoyed something of a comeback on Amazon’s watch.
These days, Daunt is philosophical on the subject of Amazon. In his view, the company’s unmatchable scale is liberating for booksellers; it means stores can focus on curating books that communicate a particular aesthetic, rather than stocking up on things people need but don’t get excited about. “They’re allowing us not to have the boring books in our shops and just be places where you discover books and talk about books,” he says. “We don’t have to clog up [stores] with medical textbooks.”
Translation: “We can’t hope to out-compete Amazon, so we’ll stop trying and focus on bookstores’ inherent strengths.”
That too, is the right move. Amazon may account for 80% of book sales in the anglophone world, but let’s face it. Thanks to Amazon’s algorithm, the top spots in fantasy and science fiction are cluttered with approved texts that bug people consume to signal their status in the cult, and space marine shovelware/chick porn billed as sci-fi for binge-reading whales.
If Daunt can transform B&N into a place where bibliophiles can connect for deep discussions about books, he’ll earn my admiration. With the deck already stacked deep against him, the outcome of his grand experiment to indie-ify B&N remains uncertain. But it’s worth the old college try.
I still see the mid-to-long-term future of publishing as a modified neo-patronage system. At the very least, my third successful Indiegogo campaign tells me the crowdfunding model isn’t a fluke.
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