Barnes & Noble has staged an unlikely comeback. CEO James Daunt shared 4 key lessons from its turnaround.

Bookstores mightiness look aged schoolhouse successful the AI era, but Barnes & Noble has staged a fairy-tale comeback nether CEO James Daunt.

After shrinking to nether 600 locations successful 2023, the storied American bookstore chain opened 57 locations successful 2024 — much than successful the full decade betwixt 2009 and 2019.

It expanded by much than 60 stores past year, and it's targeting different 60 this year, it said successful a news merchandise this week.

Barnes & Noble was taken backstage successful August 2019 erstwhile Elliott Management acquired it for adjacent to $700 million, including debt. The hedge money tasked Daunt — who led the turnaround of British bookstore concatenation Waterstones, which Elliott acquired successful 2018 — to revitalize Barnes & Noble arsenic well.

Daunt explained really he turned the page astatine Barnes & Noble during the latest section of the "Masters of Scale" podcast. Here are the cardinal insights from the conversation.

Culture change

Daunt said Barnes & Noble had the aforesaid halfway problem arsenic Waterstones: its bookstores "weren't very good."

He said that for booksellers, attraction to detail, presentation, service, assortment, inventory, and judgement each matter. Steadily improving those things twelvemonth aft twelvemonth has been cardinal to his success, he said.

But Daunt said different cardinal plank of his strategy has been to displacement distant from centralized power of stores, and put section booksellers successful complaint instead.

"Almost everything I do is astir flattening those hierarchies, and past trying to introduce corporate responsibility amongst the squad erstwhile you've done that," he said.

When each store's squad is moving the show, that's a "much nicer measurement to work, overmuch much engaging and overmuch much empowering, and each of those bully things," he said.

"But it's truthful much much difficult that often group defy it: 'We'd alternatively person the hierarchy, conscionable show maine what to do, please.'"

Daunt said that changing a company's civilization takes time, and it's for illustration "stretching a rubber band. The infinitesimal you relax, it conscionable pops back."

Data danger

Daunt — who built his ain independent bookstore chain, Daunt Books, earlier taking complaint of Waterstones successful 2011 — said that shop information tin beryllium much of a curse than a blessing.

"The information tin occasionally beryllium an absorbing reference point, but it's the judgments you make almost successful defiance of the information that will springiness you an inspiring store," he said.

As information is often held centrally, relying connected it tin unlock a "Pandora's box" wherever it's utilized to "impose uniformity connected the stores, and that really is the decease knell for us," he said.

Setting speech the information "empowers the section stores to really commencement interrogating really they're engaging pinch their customer base," and to trust connected their "gut instinct" erstwhile merchandising, he said.

He gave the illustration of a data-driven shop allocating excessively overmuch support abstraction to committee books, overwhelming parents whose young kids would happily publication the aforesaid titles again and again, while not giving preteen readers the ample array of books they want.

Daunt besides noted that "booksellers and numbers thin to beryllium sitting successful other corners of the room."

"We are the nerds who publication each our books, and erstwhile we sewage to the maths and science, conscionable gave up," he quipped.

Forgetting mistakes

Daunt said that a cardinal constituent of his attack — which has clear parallels to Warren Buffett's exemplary of decentralized autonomy astatine Berkshire Hathaway — is moving connected erstwhile mistakes get made.

Instead of scrutinizing and punishing errors, he prefers to "not look successful the rear-view mirror," opportunity thing was "idiotic," and move on.

He's recovered that this encourages inferior labor to situation decisions from higher up and frees elder unit to alteration their minds.

Spreading the word

Daunt said that Barnes & Noble has nary trading section and has "zero trading dollars to spend."

"But what we do person is young booksellers," he said. "And again, this exemplary of leaving stores to do what they want turns retired to beryllium fantastically adapted for the social media age."

Daunt hailed BookTok, the passionate organization of readers connected TikTok, arsenic a powerful root of word-of-mouth recommendations.

"As agelong arsenic we time off it to the kids pinch the bluish hair, we'll beryllium fine," he joked.

Daunt added that there's nary request for a broader trading push down popular books.

"The booksellers are fantastically bully astatine communicating wrong shop to store," he said. "Books that commencement taking disconnected successful 1 shop conscionable benignant of dispersed for illustration a rash done the business," he continued, adding that the integrated process has a valuable authenticity.