In breaking news on Thursday, the Wall Street Journal announced that a hedge fund called Elliott Management Corp is the winner of an auction to acquire the bookseller chain Barnes & Noble. (Earlier this year, in April, Elliott Management also bought a controlling interest in Waterstones, which is a 281-store chain based in the UK.)
News later confirmed that the purchase price will be $683 million for their 600+ locations. This includes assuming their $200-million debt. In addition, James Daunt, founder of Daunt Books and CEO of Waterstones, will take over management of Barnes & Noble.
In a letter to the company chairman and founder Len Riggio wrote:
The transaction will take several months to be completed since it requires a shareholder vote, and regulatory approval. During that time, our management team will work with James so that he can hit the ground running. They will also continue working on the many strategic initiatives, which are already underway.
As it happens, I know James Daunt fairly well, and I am delighted to have him as our new leader. He is a bookseller through and through, and I expect he will make a big difference in our fortunes. Like me, James believes our culture has to be more store-centric, which means more localization of assortments and operations. It follows that he believes local managers must have more authority to get the job done.
This should be good news for the long-term health of B&N. They have long been mired in keeping afloat amidst many changes in management and getting rid of bad leases. The industry has been hoping for something to keep them from following the demise of Borders, Crown Books, Book World, Family Christian, Cokesbury, and the recent announcement of the closing of Lifeway’s physical stores.
Of course we will look back at this post in five years and either be right or wrong. I prefer to think that a hedge fund isn’t going to spend that much money unless they think they will receive a return on their investment. It may mean the closure of unprofitable locations and cutting out unneeded middle management. There may also be efficiencies found between the Waterstones and B&N operations.
Fun Fridays – June 7, 2019
Wow! Will Barnes and Noble keep its name? At least they aren’t announcing closure of all the stores!
Loretta (and others who are wondering about the store in their area),
This morning James Daunt, the new CEO of B&N provided some additional comments in an interview with “The Bookseller” (link provided below):
“Daunt said his initial approach would be like his approach when he became head of Waterstones in 2011. “There were very good people within Waterstones when I arrived, and I would expect there to be people of similar capabilities within Barnes & Noble, and my job will be to empower them and set them on the right route.” He added that he expected the new owners to invest in the business, “principally to improve its shops.”
Concerning the stores, he observed that “at Waterstones I was told, and still get told, that we would have to close stores, but actually it is less about location and more about having the right kind of bookshop in whatever location it is. At Waterstones, we now do very well out of some of those shops that might have been earmarked for closure originally. My motivation is always to keep as many bookshops open as possible, and the U.S. looks quite under-bookshopped, at least compared to the U.K.”
Daunt added that he will emphasize letting staff have bookstore locations serve their individual markets and not be cookie-cutter stores, telling the New York Times: “The main thing is that there isn’t a template; there’s not some magic ingredient. The Birmingham, Ala., bookshop, I imagine, will be very different from the one in downtown Boston. [Staff members] don’t need to be told how to sell the exact same things in the exact same way.”
https://www.thebookseller.com/news/barnes-noble-deal-james-daunt-split-time-london-new-york-waterstones-1020471
“he right kind of bookshop in whatever location it is.” Recognition that one size does not fit all. Hooray!
I’m glad to hear that you know and approve of the new owner. It gives me peace of mind. I love that store.
I hope they keep the one in Grand Junction CO. It’s a wonderful place and always has a parking lot full of cars. No better way to spend a couple hours than get a good cuppa and peruse the shelves.
We have a local B & N and hope it’ll be one that stays open. I also hope the new owners make it more profitable if for no reason than to give Amazon competition.
What I find more interesting is the backstory of Paul Singer’s Elliott Management Corporation and Elliott Associates (activist) Hedge Fund he started in 1977. This makes for great plots in books and movies. It’s apparent Singer has no love for Amazon. (I’ll be watching my stock)
Activist investors buy their way onto Board of Directors of corporations. Daunt Books seem to model themselves after Independent Bookstores in regard to customer service. Should be an interesting story to follow.
Thanks for sharing Mr. Laube!
Daphne,
Great observation. I’ll have to dig a little into that myself. Thanks.
Interesting headline: Barnes and Noble sold by Steve Laube. Implies Steve was the owner. Words can be funny, can’t they. 🙂
Bob,
Who knew that I was such an accomplished broker? HAH.
Obviously the newsletter feed that goes to subscribers is programmed by the RSS feed to be formatted this way: [article title] by [article author]
My own eyebrows were raised when I saw the newletter feed in my inbox this morning.
Had to say out loud, “I wish.”
Is all after “Riggio wrote:” from his letter or does Laube comment also?
Ann,
The newsletter feed you receive in your inbox does not show that Riggio’s quote is indented. If you look online at the post (see above) you’ll see that his quote is two paragraphs long and the rest if from my hand.
Bookstores were my paradise,
a refuge out of time;
worlds unto themselves, concise,
and joy would come betimes.
So many havens have been lost
to bewitchment of the digital age
in which convenience and cost
have felled the brick-and-mortar sage.
The core of the emporium
does not lie in its inventory,
but rather as asylum from
isolation; it is community.
I wish these merchant-friends could speak,
for each is loved, and each unique.
Steve – heartening news for those books with good reception. I never passed a bookstore without lingering for an hour or more.
We have a small, local bookstore which I love (yes, more than Barnes and Noble) and thankful they are still in business and sell books by ISBN, hold signings throughout the year, and while as liberal as B&N, that doesn’t stop them from any book they read and see as worthy of their shelves. Perhaps they are popular because Barnes and Noble is already a 45-minute drive.
Barnes and Noble is a wonderful bookstore and when in the area I never pass that by. I’m delighted to hear the stance of James Daunt.
One thing that bothered me was that they only carry the top 20% of authors. This means over 80% are not represented, including new up and coming ones like myself. I hope they look at that.
Steve, thanks so much for keeping us up to date. I hadn’t caught the story.
It appears the sale will be positive for books, readers and authors. Refreshing news!
I spent 40 years in the corporate world, mostly in M&A. Daunt’s philosophy is the best news I could imagine for B&N and the industry. As an author I’m delighted.
Thanks for keeping us informed. I love Barnes and Noble.
So many college campus bookstores are B&N branded. I wonder what will happen to them. Maybe they’re the only profitable stores, though… we sure spend enough money there!
Nancy,
In 2015 B&N spun off their college bookstore division and created a new publicly held entity called Barnes and Noble Education (stock market code BNED).
It remains a separate company.. They have contracts to service 773 different college campuses.
You can read about them here: https://www.bncollege.com/about-us/
The sale of the retail operation does not affect ownership or branding of the college bookstore company.
Please correct me if I have misunderstood that.
Thanks for the info about B&N Education, Steve! I didn’t know about the spinoff.
I’ve had book signings at a couple of B&N stores, and they were wonderful to work with. I wonder how we as authors can step up to help brick and mortar book stores compete with Amazon.
Kay, I never had a formal B&N signing, but had several at the now gone-and-lamented Hastings chain. People are really pleased to meet an author, thinking we are really exotic specimens. The stores sold out all of their stock of my books each time, and all the extra copies we brought.
I did have an informal B&N signing. Barb and I had stopped for lunch, when a lady at the next table with her kids told them she had never met a Real Live Writer.
Barb, being Barb, walked over and pointed her at me. She was really tickled, immediately bought ‘Blesed Are The Pure Of Heart’ through her Kindle, and them produced a Sharpie.
I woner nowmany authors have had the opportunity to sign a Kindle? 😀
I love the idea of a Kindle-signing! There must be a way.
I mourn the closing of so many book stores. Although I admit I use Amazon a lot and really appreciate how easy it is to order a book and have it delivered immediately, I think we’re losing something important as more and more stores disappear.
Andrew — funny! Kindle should get an app that allows the author to access the book and digitally sign 😉
Thanks, Steve Laube, for keeping us posted about physical book stores. Added to your reports is the beneficial aspect of answering our questions, making the Laube e-blogs more appealing.
I, too, have had book signings at Barnes and Noble before. They were absolutely wonderful to work with. I’ve also been there for signings of other authors that seemed to go really well. I hope they continue to do those kind of events.
Hi Steve
Just read a post by a livid rather popular blogger, and would like to counter it.
1. will they continue to sell e-books
2. are they looking at new authors since right now they are not
I guess right now those are the most important questions I have right now.
thank you
Claire,
Everyone is entitled to their opinion, that’s for certain. As to the livid blogger?
1) Why wouldn’t they continue to sell ebooks? And why does it matter? If they choose to spin off and sell their Nook division? Good. It has been losing money for a long time. Sell it to another ebook retailer like Kobo that has figured out how to make it work really well in Canada.
2) Not sure what that person means by “looking at new authors.” It may be that this blogger’s book was not carried by B&N. Was it self-published? Through Amazon? If so, the B&N would not carry their competitor’s books. If it was published by a major publisher and B&N chose not to carry it, then it means the book didn’t have the cache to convince the national buyer to put it into inventory.
This broad-stroke criticism is unfounded without data to back up the claim.
We had a number of first time authors publish their books last year. They were all in B&N.
Over in my small publishing company we had a new author’s novel STORY PEDDLER by Lindsay Franklin that was readily carried by B&N because it is a really really good Fantasy.
With thousands of new books published every day, to expect B&N to carry every one of them is unrealistic at best.
Hope that helps.
Thank you. I wanted to rebut her argument. Not using your name or agency or direct quote. Just the facts.
And no, her books (though pretty well received) are not listed in the 2 (TWO) new author section.
I am not going to lambast her, but I do want to point out her inconsistencies and ill-informed.
Thank you!
When I saw on your Twitter that you wrote an article entitled “Barnes & Noble Sold,” I IMMEDIATELY clicked it out of fear for my now-favorite bookstore.
But I have to say that I feel greatly reassured after reading what you wrote. I have very high hopes that my city – Tucson, Arizona – will be able to keep BOTH of its Barnes & Noble stores open!