The Englishman trying to save American bookstores from Amazon

From FT Magazine (June 2, 2021):

On a bright Tuesday in April, the car parks at Fosse Park, an out-of-town shopping centre south of Leicester, are packed. Recently eased lockdown rules have allowed shops to reopen, and many people are enjoying their freedom. Eager customers line up in the sunshine.

One of the visitors is Oana Bacos, a 26-year-old who works nearby. Today, Bacos is giving herself a treat in a newly opened outlet of bookshop Waterstones. She stands by the shelves, holding a paperback of Convenience Store Woman by the Japanese novelist Sayaka Murata. “The bookseller recommended this, and we had a nice chat about what she enjoys, what I enjoy and all the books we have in common,” she says. “I love being here and browsing. It’s so different from ­looking online.”

Before the pandemic, Bacos was a regular at the Waterstones in the centre of Leicester, one of 286 stores run by the UK’s largest book chain. Her presence in Fosse Park is an omen: more retailers are now moving out of town. “People are happy to return to shops but bookstores are special,” says the store’s manager, Louise Walker, who joined a chain in 1987 that was later taken over by Waterstones. “They are so pleased just to be here, they talk about it like a lifeline. They want to touch the books, even smell them.”

The future of this precious experience is far from assured in the age of Amazon, ebooks and the pervasive strain on physical retailers of all kinds. A great deal depends on the benign dictator of English-language bookstores, James Daunt.

The 57-year-old executive is well known in the UK for founding Daunt Books, a quirky but much-loved group of nine shops, 31 years ago. In 2011, as the might of Jeff Bezos’s juggernaut shook publishing, Daunt was called in to rescue Waterstones from threatened extinction. Now he is attempting to repeat the trick.

In 2019, the investment fund that owns Waterstones, Elliott Advisors, purchased the ailing Barnes & Noble and its 607 US bookstores for $638m and put Daunt in charge. Then the pandemic struck.

While many stores suffered during lockdown, book sales rose sharply as people sought diversion. “I’m optimistic that people have enjoyed reading books, and they’ll continue to do so,” says Daunt, sitting by a tome-piled table at his own chain’s first store in London’s upmarket Marylebone district. “The big question is, will they find it most pleasurable to buy them in places like this?”

Another pressing question is whether Daunt can conquer the larger and more diverse US market using a formula honed in the UK. The number of bookstores in America fell from 11,200 in 2004 to 6,200 in 2018, and some doubt whether anything can halt the decline.

“If his mission is to turn Barnes & Noble into a ­successful chain, it can’t be done,” says Mike Shatzkin, a veteran New York-based analyst. “It’s impossible. The best strategy for the owners is to take out cash as long as they can, and then sell the bones.”

Daunt knows that failing would hurt more than his reputation. It would jeopardise the distribution infrastructure that supports thousands of independent bookstores across the US, with knock-on effects in UK books. “If we go bust, our world is pretty much screwed. You end up with only Amazon and the publishers,” he says. “Amazon is the predator that has culled the weak in this business and left only the strongest. If we relax for a second, it will eat us.”

When Daunt arrived in New York to take charge of Barnes & Noble two years ago, he attended a party held by Madeline McIntosh, US chief executive of Penguin Random House, the world’s largest publisher. Editors were eager to meet the new B&N boss, but McIntosh thought Daunt seemed distracted. “He kept on looking around at my bookshelves,” she recalls. “When he was leaving, he said, ‘I hope I can come back to browse. That’s what I’d really like to do.’ So he’s a book nerd, like us. That’s why we like him.”

This bookishness is not an act. But it is easily misread as softness, especially by Americans. Daunt is, in fact, distinctly determined, sometimes ruthlessly so. As he puts it, “Don’t assume good fortune. Do whatever is necessary to get through.” His first step at B&N was to halve the staff at its New York head office, and he later laid off 5,000 employees. “Behind his cool exterior, there’s an emotional intensity. He’s incredibly committed and driven,” says Tom Weldon, who heads Penguin Random House in the UK.

. . . .

The iron entered his soul when he set up his first bookshop in an Edwardian building on ­Marylebone High Street in 1990. He soon discovered that it was not an easy life. He had to sit on a lot of expensive stock, which took a long time to sell. He needed large spaces in desirable locations with high rents, and he required a lot of knowledgeable staff.

“I found,” Daunt says, “that the economics of a bookshop are ­terrible, like shit.” He spent his first four years ­fearing bankruptcy. Sometimes he did not pay ­creditors because he was short of cash. ­“If there were two men in suits in the queue, I knew the ­bailiffs had turned up,” he says.

. . . .

Amid this struggle, Daunt developed his distinctive style: ­recommending books that he and his staff had actually read and enjoyed, rather than publishers’ favourites, and displaying them artfully with their covers face out, sometimes with handwritten notes of recommendation. Most retail chains now grasp the importance of creating an enticing atmosphere in stores, but he mastered it early. He understood bookshops work best if they feel like clubs in which dedicated readers can consult expert curators.

Despite the scale of the operations over which he now presides, Daunt retains the manner of his early years. He gets around his London shops by bicycle. When we meet in Marylebone, he sports a plaster on his forehead, having hit himself by accident while pruning an apple tree at his home in Hampstead. (The family also has a second home in Suffolk.)

His spartan habits extend to holidays. The family bought “a wreck of a house” on the Scottish island of Jura four years ago but have yet to refurbish it, and instead stay with old friends on their annual visits. “It’s a big, wild island, a magical place,” Daunt says. If you walk up the west side, there are some wonderful beaches. You carry a tent or stay [overnight] in a bothy, but the most fun is to sleep in a cave.”

Daunt’s distinctive personality, his charm married to deliberate reticence, can puzzle some US executives. “Sometimes I wonder, ‘Is this because you’re James or because you’re British?’” says Jackie De Leo, B&N’s vice-president for bookstores. “I have to pull out what he really means. He doesn’t give you all the answers, but I think there’s a method there.”

Link to the rest at FT Magazine

Will Barnes & Noble’s Next Chapter Be Its Last?

From Forbes:

Barnes & Noble’s Chief Executive James Daunt is leaving behind the strategy that, decades ago, made it a bookselling behemoth.

Instead of focusing on maximizing economies of scale and simplifying the in-store shopping experience—tactics that once fostered success but, in the age of Amazon, are now leaving stacks empty—Mr. Daunt is looking to empower individual store managers to curate their shelves based on local tastes. In doing so, he is letting go of those who supervised large groups of stores and firing nearly half of the company’s New York-based book buyers who once decided which titles to put on shelves.

Personally, I think this is a really smart strategy, yet the question remains: will this turnaround effort be enough to save the bookselling giant in a post-pandemic world?

When I first read the news of Barnes & Noble’s seismic shifts, I’ll admit, I was shocked.

Yet as I thought about it more, I came to realize that in a time when purchasing the latest bestseller can be done with just a few clicks from the comfort of one’s own home, Mr. Daunt’s new approach may not be so far-fetched.

Barnes & Noble has suffered from seven years of declining revenue as Amazon’s dominance in online retail grows. By giving store managers more autonomy to make decisions based on their knowledge of the local market, Barnes & Noble may be better able to tailor what it does within its individual stores to give shoppers the experience they’re craving.

Rather than just being a place where you could buy a book, what if Barnes & Noble could become a place where you could discover a book? I spend a fair bit of time in Duck, North Carolina where our family loves Duck’s Cottage—a charming book and coffee store that has a very well-curated selection of titles. We have all bought a number of books from there, almost entirely based on the owner’s handwritten recommendation notes.

As we navigate the Covid-19 pandemic and start the long process of recovery, what will bring shoppers through Barnes & Noble’s doors may not be the desire to simply purchase a book, but the desire to be a part of something in the community. I would suggest that is something shoppers will remember, talk about and that will bring them back.

. . . .

The prior operating model for this 50+ year old business did not have a strong balance between local autonomy and standard processes across all locations, which meant clients did not have a consistent experience. This created an operational management nightmare—a challenge when trying to delight clients—and allowed competitors to find easy ways to chip away at their market share. Fast forward to the introduction of one national set of processes and the permission for local leaders to do what they thought necessary to appeal to their market, and the results were transformed.

. . . .

Contrary to a lot of decisions coming out of corporate HQ, consumers across the nation are looking to support their local businesses during the pandemic. We are seeing more and more “Buy Local” campaigns targeted to smaller communities, whether through Facebook or other platforms, and there is strong support for the local service provider or restaurant owner who remembers our usual order. Fundamentally, the team who manages every local Barnes & Noble store knows what their community is talking about, what they are interested in, what the local issues are and who the influencers are.

Link to the rest at Forbes

In many places large enough to support a Barnes & Noble store, there are are independent bookstores that really know how to do local very well and which have (for PG) a more welcoming quirky little bookstore feeling than the bland corporate design that characterizes every BN store that PG has ever entered, even in college/university towns where one might expect more local touches.

While PG has some good memories of quirky bookstores with a local flavor that he last entered a long time ago, no particular memories of any Barnes & Noble store come to mind (even some where Mrs. PG did author signings during ancient days and PG came along to provide unskilled labor for a couple of hours).

And it’s not just the small size of memorable unique bookstores that PG remembers. He still has clear recollections of going to the giant Powell’s Books mothership in Portland, wandering around their immense stacks and talking to a couple of employees who would probably not have been anxious to work at Barnes & Noble.

There’s also the fact that PG doesn’t think Daunt has a lot of money to throw around to remake the physical design of Barnes & Noble stores everywhere. This is a company that went bankrupt a few years ago and hasn’t really turned around anything since.

PG suspects that a great many BN store managers who could get work elsewhere have already done so. Plus, Covid has taken down retailers with much more savvy people running stores than BN has.

Finally, although Daunt is very good at getting press for himself, PG questions how many smart people are left on BN’s headquarter staff to put Daunt’s visions into actions. What sort of person would go to work there or stay there if they had other viable options?

BN is owned by a hedge fund (approximately $41.8 billion in assets) that didn’t buy it out of bankruptcy because the hedge fund partners all loved books. This private ownership means that the general public will only hear the Barnes & Noble financial performance information that the hedge fund wants the public to hear.