James Daunt is a man with a plan. The owner of nine independent bookstores in London, Daunt took over the failing UK bookstore chain Waterstones in 2011 and returned it to sustained profitability in 2015. Its current profits are, said Daunt, “pretty much at historic levels.”
Last week equity firm Elliott Management purchased the 627-store Barnes & Noble and installed Daunt as CEO with a mandate to produce a similar turnaround which would save the bookseller from Amazon’s retail apocalypse.
"We as booksellers have a duty to create excitement about books,” said Daunt. “If we do so, we'll continue to have customers come through the doors."
Daunt’s plan to accomplish that goal is based on two significant changes in the way a bookselling chain works.
First, said Daunt, “You need to try and get the best store for each location…there isn’t a template; there’s no magic ingredient. The Birmingham, AL, bookshop, I imagine, will be very different from the one in downtown Boston.”
Creating unique local stores involves changing some long standing business practices. At Waterstones Daunt eliminated co-op payments from publishers in exchange for in-store placement and promotion of specific titles. Daunt called it a “wholly destructive cycle,” which made stores more uniform rather than distinctive. He described the benefits of foregoing $35 million in publisher payments as “massive”. Waterstones reduced the books they returned to publishers from 20% of their stock to 3%. Said Daunt, it “stopped us from filling up our shops with books customers didn’t want to buy.” The mix of the books on sale changed. The amount of in-store stock was reduced by 20%, but the number of titles available in the stores rose by 20%. To make sure that they remained “unequivocally a bookshop” Daunt limited the sale of non-book items at Waterstones stores to 20% or less.
The second set of changes Daunt employed focused on personnel. "We had to make booksellers "self-reliant and self-motivated," he said. “We needed to pay booksellers more and make it so people see this as a career.” This began with training. Said Daunt, “If your booksellers are enjoying themselves and you've trained them and you've respected them and you've allowed them to develop their skills... then our customers truly will remain loyal to us." Eliminating co-op freed the bookselling staff from duties like returns allowing them to focus on sales. Stores could the focus on promoting titles recommend by staff members. Sales at Waterstones rose by a third.
Will the plan Daunt employed in turning Waterstones into a vibrant company work at Barnes & Noble? Those who love bookstores have to hope so.
As Oren Teicher who heads the American Booksellers Association, the group representing independent book shops, and a bitter rival of Barnes & Noble told the audience at the 2018 Book Expo, “We stand together in common cause to promote and support bricks-and-mortar bookstores. …it’s in the long-term interest of the overall book business that Barnes & Noble not just survive but grow and prosper.”
(Photo courtesy of Mike Mozart under Creative Commons.)