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From The Wall Street Journal:
A year ago, John Radford had little control over the book selection at the Barnes & Noble store he manages in Idaho Falls, Idaho. Executives in New York decided which titles to carry. The retailer’s 600-plus stores were expected to follow that blueprint.
Mr. Radford had to stock dozens of James Patterson and John Grisham books, even though there wasn’t that much local demand. Often, he’d have to return about half the inventory after a few months.
These days, he is the one calling the shots.
Led by Chief Executive James Daunt, Barnes & Noble Inc. is abandoning the strategy that made it a bookselling behemoth two decades ago—uniformity designed to create economies of scale and simplify the shopping experience. Instead, the company is empowering store managers to curate their shelves based on local tastes.
In recent months, Mr. Daunt has cut the ranks of once-powerful staffers who supervised large groups of stores and fired nearly half of the company’s New York-based book buyers, powerful tastemakers who decided which titles stores should carry. In the process, he has severed decadeslong relationships with publishers who paid to have their books placed in stores.
Mr. Daunt has made the most of pandemic-related closings in the spring to renovate and modernize stores.
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Barnes & Noble has suffered seven years of declining revenue in the face of Amazon.com Inc.’s dominance in online retail. The pandemic crushed sales in big cities, with revenue down 50% at major metropolitan stores, as well as the in-store cafe business.
In Mr. Daunt’s view, the very survival of bookstores is on the line. “I don’t think we have any God-given right to exist,” he recently told a group of publishing-industry professionals. “How is it that bookstores do justify themselves in the age of Amazon? They do so by being places in which you discover books with an enjoyment, with a pleasure, with a serendipity that is simply impossible to replicate online.”
In an interview, Mr. Daunt said empowering local store managers is central to his plans. “At the end of the day, I expect to give the booksellers complete freedom in all the things that I think should matter,” he said. “Freedom to put the books wherever they like, display them however they like, arrange them however they like.”
Mr. Radford, whose Idaho Falls store is tucked between a Macy’s and a J.C. Penney at the Grand Teton Mall, has begun offering books from homegrown literary noir stars such as C.J. Box and Craig Johnson, who write bestselling mystery series set in nearby Wyoming.
“This feels so much better,” he said. His store has increased profits this year.
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On top of trimming the ranks of corporate book buyers and district managers, Mr. Daunt closed some of Barnes & Noble’s most iconic branches, including the East 86th Street outpost in Manhattan that housed one of New York City’s most impressive art-book selections. “We’ve closed a couple of—frankly—albatross stores,” Mr. Daunt said.
The pending acquisition of book publisher Simon & Schuster by Penguin Random House, a unit of German media company Bertelsmann SE, could create new problems for Barnes & Noble. The resulting enterprise, which will account for about one-third of all print books sold in the U.S., would have more power to press for higher prices and better retail display on behalf of its authors, said Laurence Kirshbaum, a literary agent and former publishing executive. “This world is about leverage,” he said.
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“As you let the stores diverge, a quarter will be brilliant and a quarter will be absolutely terrible,” Mr. Daunt said. “A significant number of your stores will become worse, not better. Then you teach and encourage them and, in time, everybody becomes better.”
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Morgan Entrekin, the publisher of Grove Atlantic, a publisher whose authors include Lily King, Jim Harrison and Mark Bowden, said Mr. Daunt’s model “levels the playing field” while emphasizing the chain’s thousands of experienced booksellers who are enthusiastic readers. “It also lessens Barnes & Noble’s dependence on books sold by Target and Walmart, ” he said.
Barnes & Noble went through several unsuccessful turnaround attempts, including new store layouts and a greater emphasis on toys and gifts, as it churned through five CEOs between 2013 and 2019.
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Mr. Daunt first championed the tactic of ceding control to local managers at Waterstones, which was losing money when he got there. It took him four years to make the chain profitable again.
Waterstones has a 3.5% return rate. That’s the number of unsold books that retailers return to publishers. Barnes & Noble’s return rate is about 25%, and as high as 50% on new titles.
“A good bookseller has little to no returns,” Mr. Daunt said. “When you let the stores choose what they stock and choose how they price it, the returns more or less completely disappear.”
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Mr. Daunt is passionate about organizing books the proper way, down to the shape of display tables—round ones are the best, he says. He’s pushed Barnes & Noble to place books on shelves “face out,” so the whole cover can be seen. He believes in arranging by category, not alphabetically by author.
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A lot will ride on the performance of newly empowered store managers. Mr. Radford in Idaho Falls said he’s giving more shelf space to books related to local interests, including Yellowstone National Park and the Mormon faith.
Where books were once arranged alphabetically, Mr. Radford is mixing and matching similar titles by subject. On a bookcase devoted to U.S. history, Joseph J. Ellis’s “American Sphinx: The Character of Thomas Jefferson” is sandwiched between David McCullough’s “1776” and Rick Atkinson’s “The British Are Coming.”
Some Idaho Falls employees are struggling to adjust to the new playbook. Part of the problem, Mr. Radford said, is “having a teenager trying to shelve American history.”
Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)