In an unexpected turn of events, Tattered Cover, the 53-year-old Denver bookstore chain known for its fierce advocacy of First Amendment rights, has been sold to Barnes & Noble. Through a subsidiary, B&N and its owner, Elliott Investment Management, will buy the Denver chain of four stores for $1.83 million. Tattered Cover will keep its name and branding, and B&N anticipates that it will retain a majority of the 70 people currently employed at the four locations.
The sale to TC Acquisition Co. LLC, an affiliate of Barnes & Noble Inc., is expected to close by July 31, pending bankruptcy court approval, according to the Denver Post. The owners of Tattered Cover, an investment group named Bended Page, filed for Chapter 11 bankruptcy in late 2023.
“This creates the nation's first true hybrid bookstore, a bold and sustainable response to a marketplace that is dramatically different from when Joyce Meskis operated Tattered Cover for so many decades,” Brad Dempsey, interim CEO of Tattered Cover, said in a statement. Dempsey became interim CEO in July 2023, replacing CFO Margie Keenan, who had served as interim CEO since store co-owner Kwame Spearman resigned from the position in April 2023 following an unsuccessful run for the Denver mayoralty.
The move to retain Tattered Cover’s branding, while operating under B&N’s umbrella, echoes moves B&N CEO James Daunt has implemented in the U.K. There, the company has acquired several independent bookstore brands and continues to operate them under their previous names, including Blackwell’s, Hatchards, Foyles, and Hodges Figgis, among others. Starting in 2014, Waterstones Books—also under Daunt’s leadership—opened a number of stores with names that sounded similar to those used by some English indie bookstores, but were actually run by Waterstones. These include Harpenden Books in Hertfordshire and Southwold Books in Suffolk.
In an interview with PW, Daunt did not shy away from the U.K. comparisons when discussing the pending purchase of Tattered Cover. Bookselling can be “an unforgiving business” in both the U.S. and U.K., Daunt said, adding that if he can keep an independent store alive, he will. Calling himself a “vocational bookseller,” Daunt said that a focus on keeping “great stores open” is imperative for the book business. “I would much, much rather there be hundreds of mid-sized independent booksellers,” he said, “but if one gets in trouble it is our responsibility to support it.”
Daunt invoked the turnaround at Blackwell's when asked what he has planned for Tattered Cover. At Blackwell's, Daunt upgraded the IT systems and recapitalized the store to get it on its feet; sales at the store have grown “dramatically” since the takeover, Daunt said. In looking for possible acquisitions, Daunt’s criteria includes a store’s heritage and the quality of the bookselling team—something that Tattered Cover comfortably meets, he said. While it is too early to make any final decisions, Daunt said, it is likely that Tattered Cover will keep some of its own, longstanding elements while adding some B&N programs. And again referring to the U.K. experience, Daunt said, "store teams run their stores to their own idiosyncrasies while benefiting from the support structures of the wider business, notably in IT and logistics."
Tattered Cover is among the country’s most storied independent bookstores, and came to national prominence under the leadership of the late First Amendment rights advocate Joyce Meskis, who bought the store in 1974 and died in December 2022 after a long, influential career in independent bookselling. In the 2000s, Meskis won a long fight to quash a police search warrant for the book purchase records of a customer who was a suspected drug dealer, resulting in a unanimous decision from the Colorado Supreme Court. “People still come up to me and say thanks,” about her efforts to support the freedom to read, Meskis told PW in 2015.
In 2017, Meskis sold a controlling interest in the store to industry veteran Len Vlahos and his wife Kristen Gilligan. Bended Page, cofounded by Denver natives David Back and Spearman, bought the company in 2020. They subsequently put the store up for sale in March 2022.
Tattered Cover's 2022 financial results show that, excluding federal Covid stimulus funds, the bookstore's net loss was $577,000, with revenues totaling $10.6 million and costs at $11.2 million. A January court filing said that the company had $3.1 million in outstanding debt to creditors in unsecured claims, according to the Denver Business Post. This included some $820,000 in secured claims owed to five lenders, including $300,000 owed to its board of directors.
In all, a total of nine parties express interest in buying the company, and al signed nondisclosure agreements. Barnes & Noble’s winning offer—which was the only one that pledged to keep all four stores open—was one of three submitted by a deadline for offers, with one bid coming from Spearman and a partner and the other from a third party. A planned auction scheduled for June 11 was ultimately canceled.
The purchase will cover the $1.6 million in secured claims that Tattered Cover now says it owes, and Barnes & Noble will pay $50,000 in back rent while extending the leases on the store’s sites. The lease on the store’s main location, at East Colfax Avenue in Denver, will be extended through 2038, and the lease on the store in the Aspen Grove shopping center in Littleton would run through 2030, according to a spokesman for Bended Page.
Spearman told the Denver Post that was “optimistic” about the purchase and the continuation of Tattered Cover, noting that he believes that B&N will do everything it can to "preserve the memory of a great institution.”
