If the fortunes of Barnes & Noble are going to be turned around—and new CEO James Daunt is confident they will be—the improvement will be led by the company’s booksellers. In an interview at B&N’s flagship bookstore in New York City, Daunt repeatedly stressed that the makeover of the company will be done by empowering store managers and other booksellers to create stores that meet the needs of their local communities. “The bookseller in North Dakota knows what the customer wants better than someone in New York,” Daunt said, adding that managers won’t be held hostage by planograms from New York when determining how a store should be stocked.
While all buying will still be done from New York (publishers will not need to have reps call on individual stores, as some had thought), managers will be free to display books where they want, order them in the quantities they need, and merchandise them appropriately. Under the new operating philosophy, store managers will be given more responsibility for the performance of their stores. “They won’t be able to say the store isn’t doing well because the people in New York don’t know what they are doing,” Daunt said.
Daunt acknowledged that the change will almost certainly lead to sales declines at a few stores, but he said he is confident that B&N’s booksellers have the ability to create successful stores. He brought that message to the B&N store managers conference held in Orlando last week.
If booksellers are key to reinvigorating B&N, better merchandising is not far behind. Daunt believes that the B&N look has grown stale. “You can’t be a successful chain if you follow a single model,” he said. “Chain stores are exciting when they are shiny and new, but they don’t age well. You need to evolve.”
Professional booksellers are in the best position to create attractive, effective bookstores, Daunt noted (he has been in the bookselling business for almost 30 years). Hiring a designer who works on a Target one week and a Costco the next week isn’t the best route when designing a bookstore, he added. “It takes a special skill”—one learned on the bookstore floor.
Daunt said that books need to be presented better within the stores and that he has no problem with B&N selling some nonbook items. He thought B&N’s newsstands were a good complement to books but that some other areas “had lost their way.”
Though Tim Mantel, B&N’s chief merchandising officer, was let go last month, and longtime senior v-p of corporate communications Mary Ellen Keating’s last day was September 13, Daunt said he doesn’t envision making wholesale changes in the executive team. In the seven years he has been running Waterstones, he has brought in only one outside person to the U.K. chain’s executive team. He wants to create a culture at B&N that will give employees career paths. “We have talent here,” he said.
Though Daunt is firm in his vision of how B&N can be turned around, he is much more flexible on the size of the stores. “It depends on the location,” he said. At Waterstones, he opened stores ranging from 750 sq. ft. to 28,000 sq. ft. And while he doesn’t think there is a single perfect store size, he said a 15,000-sq.-ft. store offers options that smaller stores do not, such as opening a cafe. Daunt doesn’t expect to close many stores, though it is likely some stores will be shut and then relocated in the same market. He called leaving a market entirely “ridiculous.”
Daunt made it clear his initial focus will be on improving B&N’s physical stores. “If you improve the stores, everything else will rise,” he said. He has no plans to discontinue the Nook line as long as the devices keep pace with the Kindle. As for BN.com, he believes its performance can be improved, in part, by improving the site’s content. He thinks B&N’s relatively new buy online and pick up in store program has the makings of a hit, noting that Waterstones’ similar program has been a great success, racking up annual growth rates between 30% and 40% over the past few years.
Daunt is aware the turnaround will take some time. At Waterstones, the first signs of improvement took about six months to appear, but, he observed, “B&N is a bigger business.” He said B&N’s progress can be rightfully assessed in the 2020 holiday season. “There are lots of details to get right,” he added.
With the 2019 holiday season around the corner, Daunt is realistic about the fact that not many changes can be made before the new year. “I would like to settle things down and maybe tweak the merchandising” between now and the end of the year, he said. He also knows that, in addition to time, improving B&N will require investment. B&N “won’t get turned around without spending money,” he noted. “The stores need love, and dollars.”
Daunt isn’t phased by running both Waterstones and B&N, but he will spend most of his time in the U.S.; “This is where the heavy lifting needs to be done,” he said. Asked why he wanted to buy B&N (with the financial backing of Elliot Management), Daunt said he has been a bookseller for most of his life. “B&N is the biggest train set in town,” he said. “There is no reason this company can’t be successful.”