James Daunt on the retail chain’s resilience and the industry’s evolution
March 15, 2023
A funny thing happened on the way to Barnes & Noble’s long-predicted disappearance from the retail scene. It never happened. Instead, the chain is growing, with plans to open about 30 stores this year and remodel 90 more. The world’s largest retail bookseller is returning to a books-first philosophy and dropping items like bottled water and batteries that customers can buy elsewhere. It’s also trying to make its stores feel cozier.
Behind all this is CEO James Daunt, who also is managing director of the British bookshop chain Waterstones, which he is widely credited with saving. A true book lover, he also owns nine independent bookstores named Daunt Books. NRF contributor Bruce Horovitz asked Daunt about the evolving retail world of books.
How personally do you take the survival of Barnes & Noble?
It would have been very regrettable had Barnes & Noble not survived. It was very important for Barnes & Noble to survive because books matter. It’s important to keep the discovery around books alive.
How do you handle being CEO of three different bookstore chains at once?
Bookstores are a very similar business. Yes, there are quantities of scale, but they all share the exact same principles. I’m not a CEO who comes in and seizes control. But I did come in and dismantle some things.
What did you dismantle?
Most retail chains seek through their operation to have a consistency in their offerings — and if they mess up, it goes down the drain. … But you don’t want consistency with bookstores. You want each to reflect its local community and the personality of the bookseller who runs that store.
Didn’t Barnes & Noble displace a lot of independent bookstores?
Some did go out of business, but … I believe that independent bookstores can thrive. I’ve backed that with my own money because I own nine of them. Keep in mind, the best bookstore in New York City is McNally Jackson Books, and they have nothing to fear from Barnes & Noble.
How complex has it been turning around Barnes & Noble?
I haven’t found it any different from running Waterstones. The complexity lies in steadily improving the retail environment of a bookstore, which takes time and money. Once you are doing things better, you are selling more and then you can start building the business.
What’s the most pressing problem at Barnes & Noble?
You need to create attractive bookstores where the booksellers are confident and happy in their world. The really smart thing we did was to keep our workers employed during COVID-19. That way, when we were ready to re-open, we had better bookstores.
What else needs to be fixed at Barnes & Noble?
We have to learn how to run a decentralized chain. In the longer term, we need to improve IT and distribution. It just takes money.
What changed at Barnes & Noble during COVID-19?
We took everything off the shelves and thought about how to improve the layout of the shops on the principle that we’re no longer trying to sell the maximum number of titles. A bookstore is a place for discovery and to dwell. It needs rooms instead of racks.
Why did Barnes & Noble get rid of so many products that aren’t books or paper?
The business has been in long-term structural decline. My predecessors brought in more and more things that weren’t books hoping to sell more stuff. But the impact was the opposite. It was accelerating the decline by creating junky stores.
We used to sell bottled water in a tower. We sold a lot of it. My view is you can have water in the café — that’s fine. But you don’t want to stack it like you’re a CVS. So, we gave up our single largest dollar item. We’re a bookstore, not a supermarket.
What else did you get rid of?
Batteries. You don’t go to Barnes & Noble to buy batteries.
What determines what you’ll sell at Barnes & Noble?
If you can put it in a bag with books and feels natural to be sold with books, we’ll sell it. So, we’re steadily upgrading and improving what we sell alongside books.
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Have you added anything that you didn’t previously sell much of?
If it’s something to do with paper, you’ll find more of it. We used to sell only Hallmark greeting cards. But if you want a broad range of cards, it can’t just be Hallmark. So, we now carry many others. We also sell a lot of journals.
What else is changing at Barnes & Noble?
We had stand-alone media departments with walls around them selling DVDs, CDs and vinyl. We’ve been ripping those out and putting in much more attractive bookshelves. We’ve refreshed about 90 stores. So, we’ve redeployed space and most of it will go to books.
You also dumped those promotional payment plans where publishers pay you to prominently display their books.
You can’t have those and give stores autonomy on how to display their books. Stopping that was quite painful because it came at a high price.
What are your growth plans?
We need to keep on improving and investing in existing stores and making them more attractive. We spend around $400,000 on a remodel and will do about 90 stores in the next year. We also will completely refit a few stores, which is $3 million to $4 million for each. It’s about as expensive to refit as it is to open a new store. We aim to add about 5% to the total store number this year — about 30.
How did Barnes & Noble go from closing stores to opening new ones?
We are massively changing. We opened more stores in 2022 than we opened in the previous decade. We opened 22 in 2022. So, this is a big, big change.
How many total bookstores do you own from all three chains?
Just over 1,000. There are 600 Barnes & Nobels. About 300 Waterstones. And 100 Paper Source stores. I do not count the nine shops of my own in England, which remain independent. I call them Daunt Books. I guess I’m not very imaginative.
What is the evolving role of a retail CEO?
I’m not a retail CEO — I’m a bookseller.
How is the retail landscape changing?
The durability of physical retailing is encouraging. Sure, each channel has challenges with omnichannel sales. I do watch other retailers very closely to see what I want to learn from them. The good thing is, people still love to shop.
What retailers have you learned from?
Well, H&M and Zara. They are visually so attractive. They have an emphasis on store design.
What should a great bookstore look like?
It should look inviting and attractive no matter what size it is. We recently opened a 10,000-square-foot Barnes & Noble in Brooklyn (N.Y.) that’s very small but very attractive.
What do you personally look for when you walk into a bookstore?
Are they presenting everything attractively to me? Do they have the right books on the table? Do they have people in there who know what they’re doing? You know within 90 seconds if you’re in a good store or one that’s less good.
What do you read?
I always read a lot of great fiction. I also always have a nonfiction book to keep me educated.
Are you concerned that books might be replaced someday?
I’ve been bookselling for 30 years and have always been told that books are one step from the grave. There was TV. Then mobile phones. Then Kindle. Then gaming. Then social media. I’m sure entire books will someday be written on eyeglasses by AI. But physical books have been around for centuries, and they’ve lasted pretty well.