James Daunt will split his time between London and New York after Waterstones' parent Elliott Advisors (UK) announced that it had agreed to acquire the giant US bookseller Barnes & Noble for $683m. Daunt told The Bookseller that he needed to get to know the US chain but said he did not expect to make major changes to the number of stores or run-down its e-book business the Nook.
Daunt said he and Paul Best, who runs Elliott Advisors (UK), had been working on the acquisition since October, with Daunt motivated by a desire to save and grow the chain. The move has been largely welcome by publishers who have seen Daunt lead a recovery at Waterstones, but many will be concerned about how he divides his time in the future.
Daunt told The Bookseller that a strong Barnes & Noble was important to publishers, but also to rival booksellers. "There is an inherent logic to it. Waterstones had faced the same trials and tribulations, and although the retail climate is different in the US, we operate in broadly similar ways. There is also an element of self-interest; it really matters to us that Barnes & Noble can continue to do what it does, and it really matters that publishers can continue to sell print books through these stores, as well as, obviously, through Amazon."
Daunt said he planned to split his presence between the US and UK but would be spending a "substantial" amount of time in New York as he gets to know the business. Kate Skipper, chief operating officer of Waterstones, will run the UK chain in his absence. "As you can imagine, the negotiations since October have been pretty distracting, so the management has already dropped down to Kate."
Daunt said his initial approach would be similar to when he took over at Waterstones, to invest in the bookshops and "manage through the people already there". He said: "There were very good people within Waterstones when I arrived, and I would expect there to be people of similar capabilities within Barnes & Noble, and my job will be to empower them and set them on the right route." He said he expected Elliott to invest in the business, principally to improve it shops, but would also look to grow the portfolio.
In his prepared press statement Daunt, said: "Our purpose is to create, by investment and old fashioned bookselling skill, bookshops good enough to be a pleasure in their own right and to have no equal as a place in which to choose a book. We counter thereby Amazon’s siren call and defend the continued existence of real bookshops."
But Daunt told The Bookseller that he did not yet know enough about the business to understand whether he would need to close stores, as many have long suspected a buyers would do, or shutter its troubled e-book business the Nook. He said he needed to also talk to US publishers to understand what they needed from the bookseller. The company operates 627 Barnes & Noble bookstores in 50 states, but Daunt said it had not invested enough in it stores, and suffered in the same way Waterstones had, from trying to sell the same books in the same way in stores as different as those in "Florida and Alabama".
"My strategy, as it was when I came to Waterstones, is to understand the business before I come up with any conclusions, but then try to do what is sensible. I have no idea on the Nook yet, but it is really exiting to have that kind of business, particularly where the investment has already been made. At Waterstones I was told, and still get told, that we would have to close stores, but actually it is less about location and more about having the right kind of bookshop in whatever location it is. At Waterstones, we now do very well out of some of those shops that might have been earmarked for closure originally. My motivation is always to keep as many bookshops open as possible, and the US looks quite under-bookshopped, at least compared to the UK."
In a letter to employees reported on Publishers Marketplace, B&N chairman and founder Len Riggio welcomed the change in ownership: “The transaction will take several months to be completed since it requires a shareholder vote, and regulatory approval. During that time, our management team will work with James so that he can hit the ground running.
"They will also continue working on the many strategic initiatives, which are already underway. As it happens, I know James Daunt fairly well, and I am delighted to have him as our new leader. He is a bookseller through and through, and I expect he will make a big difference in our fortunes. Like me, James believes our culture has to be more store-centric, which means more localisation of assortments and operations. It follows that he believes local managers must have more authority to get the job done."
Although the store chains will be run separately, Daunt said he hoped that as the businesses moved forward they would benefit from a joined-up approach. He refused to be drawn on when Elliott Advisors (UK) may wish to exit the two operations, but the acquisition creates a combined business with sales of £3.3bn making a future flotation of the group likely.
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