according to the bestseller list on its website. (“Not Built for
People Who Actually Read,” read aNew Yorkerheadline.) The
company also sells some titles at its Amazon four-star stores, a
bizarre and more extensive embodiment of its purchasing algo-
rithm where books are mixed in with laundry bags, motion-
activated doorbells, and other four-star-rated products.
What really terrorized Barnes & Noble was the Kindle tab-
let. About 3 in 4 e-books in the U.S. are bought and read on a
Kindle, giving Amazon enormous sway with publishers. In 2010
the company pulled books from Macmillan Publishers Ltd. in
a dispute over the pricing of its e-books on Amazon.com. The
fear that e-readers would soon kill the assembly of ink, paper,
and glue fueled the development of Barnes & Noble’s own tab-
let, the Nook, which sought but ultimately failed—at a cost of
more than $1 billion—to compete with the Kindle two years after
Amazon introduced it in 2007.
The experiment drastically weakened Barnes & Noble at a
time when its commoditized approach to bookselling effec-
tively rendered the chain a collection of charmless warehouses.
Revenue peaked at $7.1 billion in 2012, which it attributed in an
earnings call to a temporary rise in visits to its stores follow-
ing the liquidation of Borders. Sales have been in free fall ever
since. In 2018 revenue crashed to $3.7 billion, the lowest since
2000, and the company has consistently failed to turn a profit.
That February, Barnes & Noble laid off almost a tenth of its
employees, a majority of them full-time staff who’d worked at its
bookshops for decades. It was one of several culls that saw the
company’s onetime workforce of 56,000 slashed in half since
the early 2000s. Months later an unnamed acquirer rescinded
an offer to buy the chain when its then-CEO, Demos Parneros,
described the business in a meeting as “an ugly mess” with
“no realistic prospects for success,” according to court filings.
Four CEOs have helmed Barnes & Noble in the past fiveyears, two of them with mass-market retail experience—at
Staples Inc. and Sears Holdings Corp. They sought to standard-
ize Barnes & Noble’s network of shops into a single, transpos-
able model—a national blueprint for how books should be sold
everywhere. Daunt aims to undo that work, spending three
weeks per month in New York running Barnes & Noble. He
wants to encourage booksellers to arrange their local window
displays with titles that will be relevant to the shoppers passing
by. “Anybody will know that people don’t read the same way in
Birmingham, Alabama, as they do in New York City,” he says.
Promotional agreements, in which publishers pay book-
stores to take on inventory and showcase it, are a common
source of revenue in the bookselling industry, but they can
be grossly inefficient. Months later shops have to return thou-
sands of unsold copies to their suppliers if demand is weaker
than expected. Barnes & Noble’s current return rate across all
titles is about a quarter, roughly the same as when Daunt joined
Waterstones. It’s worse for new releases: About half of the lat-
est books Barnes & Noble stocks are returned unsold, he says.
Daunt was also aghast at Barnes & Noble’s overzealous focus
on in-line merchandising—shelves snaking through the check-
out lines targeting impulse shoppers with irrelevant last-minute
products such as stockings and sunglasses. The chain, which for
years sold complementary but more profitable items including
puzzles and calendars, was now hawking lukewarm bottles of
Fiji water at its cash registers, along with essential oil diffusers
and Himalayan salt lamps.
Under Daunt, Barnes & Noble will shrink the space it allo-
cates to miscellany, including its CD and DVD section, replac-
ing it with expanded children’s and young adult sections.
The company is also testing new layouts at some of its stores,
such as lower tables instead of midlevel units, to speed up
the traffic. Daunt says the New York flagship could start look-
ing “pretty good” after an investment of $5 mil-
lion. Elliott has agreed to front the initial cost of
renovating Barnes & Noble’s stores until the book-
shops are profitable enough to reinvest in them-
selves. “Ultimately it’s going to cost an immense
amount,” Daunt says. If the return justifies his early
initiatives, the total amount spent on renovating
the branches will surpass $100 million.
Beyond repairing the elevators, steam-cleaning
the carpets, and swapping in sleeker fixtures, Daunt
says, the company’s bookselling strategy needs
a complete overhaul. In a misstep that attracted
national headlines last month, critics accused Barnes
& Noble’s Fifth Avenue store of “literary blackface”
after it redesigned covers of classics, depicting Moby
Dick’s Captain Ahab in various skin tones and cast-
ing Frankenstein with a black monster, all to cele-
brate Black History Month. The initiative, which
Daunt says despite its good intentions was “a little
bit daft” and that he knew nothing about until it was
announced, was canceled within hours.
Another major aspect of the strategy to revive the54
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