Barnes & Noble was sold to hedge fund Elliot Advisors for $638 million, a move that could have potentially saved the bookstore giant from total collapse.
The New York Times reported the acquisition follows the hedge fund’s purchase of the British bookstore chain Waterstones in 2018. James Daunt, the CEO of Waterstones will also act as the CEO for Barnes & Noble and will be based in New York. Barnes & Noble has 627 stores in the U.S.
“We are pleased to have reached this agreement with Elliot, the owner of Waterstones, a bookseller I have admired over the years,” said Leonard Riggio, founder and chairman of Barnes & Noble in a press release. “In view of the success they have had in the bookselling marketplace, I believe they are uniquely suited to improve and grow our company for many years ahead.”
“I look forward greatly to working with the booksellers at Barnes & Noble,” said James Daunt, newly appointed CEO in the press release. “Physical bookstores the world over face fearsome challenges from online and digital, we met these with investment and with all the more confidence for being able to draw on the unrivalled bookselling skills of these two great companies.”
Waterstones and Barnes & Noble will operate independently.
“Somebody else had to save Barnes & Noble – the present ownership succeeded in a completely different environment and was not ready to jump into the 21st century,” Mike Shatzkin, the chief of book industry consulting firm Idea Logical Company, told The New York Times. “The fact that they own Waterstones certainly puts them in the right direction. Their ability to influence the publishing industry is going to be stronger being in both markets.”
MCM Musings: If you recall the 1998 Nora Ephron movie, “You’ve Got Mail,” Meg Ryan plays the owner of a small independent children’s bookshop in New York. She’s forced to close her store due to competition down the block from the big, bad, Barnes & Nobles-esque book chain, with Tom Hanks in the role.
Back then, people were just getting used to online shopping with Amazon in its infancy. Soon, small mom-and-pops (including bookstores) starting falling victim to big-box retailers, thought to be the real threat to the future of shopping. Then further up the food chain, Amazon started having its way with the big boxes.
Retailers like Barnes & Noble and the late great Borders Books (I really miss Borders!) struggled to compete on price and convenience. Customers chose convenience and online discounts over the big comfy chairs and delicious coffee experience of physical bookstores, and e-readers started to take off.
This takeover was the right move for Barnes & Noble, enabling it to sidestep the fate of Borders, B. Dalton, Waldenbooks and countless independent bookstores, all swamped by the rising tide of ecommerce and shifting consumer habits.