Producers' Pick | Barnes & Noble CEO James Daunt on how he saved the company

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Hey welcome back everybody. With me in studio is one of the most successful CEOs around the world and certainly it's done a small miracle when it comes, or I say a major miracle, when it comes to the fortunes of Barnes & Noble. A lot of people thought it was going to go the way of Borders Books and so many others and said they're probably going to have to liquidate, but instead even during the pandemic they not only survived, they are thriving today. And I know it personally, I've probably been to as many Barnes & Nobles as anyone you will listen to. Having the books come out like I've had over the last few years and traveling the country and the ones that always say yes you could sign here at Barnes & Noble, James, even before you had a chance to take over. James Daunt, welcome to the show.

Thank you very much. So first off, when you took the job at Barnes & Noble how did you assess what the challenges were and why did you think the principles that worked overseas would work here? Well I suppose that was the main thing I had. I'm an independent bookseller by trade. I've been an independent bookseller since the 1990 and I took over at Waterstones which is the Barnes & Noble equivalent in the United Kingdom when it went bankrupt in 2011. So I had a good decade of sorting that out and when the opportunity came to come to the United States and Barnes & Noble, the theory was that the same principles would apply. People read books in the same way, they enjoy bookstores in the same way and therefore we needed to sort things out in the same way.

And when you say sort things out what was your approach? Well mine is that people come to a bookstore to enjoy the experience of being in a bookstore and therefore it is beholden upon the booksellers to create really nice and engaging experiences in those stores and sadly the experience in chain book selling generally hasn't been good enough over the years and Barnes & Noble had deteriorated and we needed to bring it back, we needed to bring it back to life. So people want to come, you want the coffee shop number one, you want to make it possible to read there? Not only do you want the people to be personable but also I heard too there was some controversy about what other things do you have besides books? Do you have calendars?

Do you have toys there? What's your approach? My approach is firstly that it depends where you are and that's a basic principle both for the books that you present to your customers and the other things around it. Do what's right for your community and therefore you have to decentralize, you have to no longer direct everything from a home office. You have to trust your managers. You have to trust your managers. Some places need big cafes, some smaller, big newsstands smaller, lots of toys and games but whatever you're doing that isn't a book make it support the book and be relevant to the book buyer and be right for your community.

What is fundamentally in stone and what can a manager actually decide what to do? There's certain things that Barnes & Noble must have under your leadership and what's the point where they can be creative? We are a bookstore. First and foremost, we are a bookstore so books are what we will judge you on and which we expect our customers to judge us on and therefore as a bookseller manager, assort your store however you like, arrange it however you like but do so to a standard and champion books.

If you do that, you can do whatever you like. We don't tell you what to put where, we don't tell you but we do expect you to really appreciate books and understand books and work with your community. So James, when you came in people worried, right? Tell us the perception now that you've had a chance to get to know these men and women that run these stores. What was the perception of you when you came in and now that you got to know them and they realize the type of guy you are and the success that you've brought, what did they tell you? To be honest, I was welcomed, hugely welcomed sort of partly because it had been such a success at Waterstones and Google told them that so they were and they were living this slow deterioration which closed hundreds of stores, sales were dropping year after year.

Why was it dropping like that? Because we had a model which said every store had to be the same. It was predicated on publishers paying to have books put in particular positions and that was then sent to all the stores and you will do this, every single store the same. It created very uniform, very consistent stores, that works with other retailers. When you walk into Zara you want to have the same clothes, when you walk into CVS you want the same shampoo, whatever it is but in a bookstore you want it to reflect what you in your local community want and when we allowed the booksellers to do that, I think they saw that this was something that they could do better and that trust has been paid back a hundred times over.

Can you give me an idea of the numbers, how they changed? Well, we actually just after I joined the pandemic happened and then we had our in retrospect was a huge stroke of fortune because we had to close our stores and rather than follow our booksellers, we kept them employed and we said use this as an opportunity to move your stores around, rearrange the furniture, create the spaces that you want. Did you find they had ideas? They had ideas and about a quarter of them had amazingly good ideas and about a quarter of them had terrible ideas and in between but we were able to get the people who had the great ideas locally to go to the stores down the road and also discussion happened between them and actually they figured it out and when we reopened we had much better stores and that was a huge piece of luck. But yet you still want the revenue of a national deal so let's say John Grisham comes out, established author and he wants end caps on all these aisles. Do you turn down that revenue now because you've localized things? We did. The minute I joined we stopped taking those dollars.

We don't take any money at all now because it is directly contradictory. You can't say that the booksellers put John Grisham on the end cap in this position because we've been paid to so we don't take any money at all but what we are doing is we know we have sensible booksellers out there. They still want to sell John Grisham but each store will have a different position to put it in. The length of time that that John Grisham will sell will vary. Some will carry on selling for months, others it's a big quick burst so I think the bookselling still goes on. For publishers actually they're still selling those books but we have complete freedom as to how we curate our stores and that's the essential. So tell me about the American market as compared to overseas. It's bigger and god bless the American consumer because they spend in a way that perhaps isn't going on overseas. We have a lot of troubles in Europe even for books, economic problems in Europe.

In the US the robustness of the economy, the confidence of the US consumer means that as we've come out of COVID it's been dramatically stronger so we're very happy. You know it's so fascinating if we were talking in the 1980s and they were able to talk to Steve Jobs and say you know what's going to happen we're going to have this digital era and your everything you want is going to be in the palm of your hand and books can be digital now and you can walk around with this pad we'll have everything on there. You would think that books are going to be part of the past you know like bell bottoms. Why do you think books have sustained themselves?

I'm sure you talk about that all the time. I think I've always believed that the physical object of a book is a wonderful thing. I actually am fully in favor of e-reading and kindles and nooks and all of these if in the right place you know you want it when you're traveling or you want it because you don't want the noise of while you're sleeping for the person sleeping next to you. There are reasons why you'd want to but you don't have the physical book you don't have the connection with the physical object and a book was a great invention long time ago and it still endures. It decorates, it fills bookshelves, you connect in terms of just the physicality of it. You remember what is in that book and also buying books in bookstores is just really enjoyable. The serendipity of finding and discovery in a bookstore is not replicated online.

James Daunt is here with the CEO of Barnes & Noble. It's one of the big success stories of the chain. How many stores do you have?

Where are your best? We've got a bit over 600. They are in literally every single state. We're now beginning to open up new stores which is really exciting with long period, a decade of not opening up in any meaningful way.

Now we are. They are successful everywhere. It's not actually about a particular, it's not metropolitan, it's not the more affluent, it's not, we have really really good bookstores.

What actually determines our success is the caliber of our individual book selling teams and managers and I think those are generally elevating all the time. Do you worry about, everybody worries about the next generation, especially in TV. Ah, no one's turning their TV on.

They're not watching cable. They're, whatever it is. Do you worry about a generation coming up who aren't readers?

Who are Snapchat, you know, there's Snapchat and... I've been in this game a very long time, 30 years a bookseller and throughout my career in book selling and today the energy and the drive and the impetus of our bookstores comes from what we call young adults and today it's book talk. It's these kids who pour out of the school into our stores. They buy books, they consume books, they bring energy into our stores. How you can be worried about the future when your most vibrant part of your store is people aged 15 to 25.

Is that true? And that's true and they're the guys who work in our stores as well. You know, young people love physical books. They're really immersed in them and actually the pandemic has been a huge boost to that. We came out of the pandemic with far more customers than we went into it. You know, it's interesting because during the pandemic there were, you would think out of all the entertainment people talking about Netflix and whatever but other people read, right? Other people just caught up. I have to read.

My job is paying me or not paying me not to work. So maybe they rediscovered it. Have you done studies on that to find out what people were doing? Well that is the astonishing thing and it's not just in the United States. It's not just the United Kingdom.

It's everywhere in the world. During the pandemic they started to read more and reading is a habit. Once you realize how great reading is you read more of it. It's like I think seeing a great movie you want to see the next one quickly but there are so many good books and then the social media actually brought a huge focus and attention on good books.

I mean that these book talk successes were really good books and great books and because people and particularly kids were reading more good books it just exploded and then we had things like Colleen Hoover exploded, we had political biographies exploded, we had all over the place and it's been very very exciting for booksellers. So James, why were you convinced that the model would work here that worked overseas? I think that you did know America. You were here before.

I know and love America. I think that the the key is do we have booksellers in the United States? Did we have people who were vocational and cared and really were passionate about bookselling working in our stores? Came and visited a relatively small number of Barnes and Noble. Every single one I walked into there were booksellers who cared about their job.

They were just being held back by the structures around them so I knew if we could relax that give them back their responsibility and and give them back their pride in their own stores we would have something great. What are people reading? I mean I guess goes by the demo.

Is it bios? Is it news? Is it self-help?

Is it sports? Kids books? All of those things because of every age comes into a bookstore but we've had a recently a massive increase in what young people read so a lot of manga is selling more than it's ever done before. Graphic novels, romance has taken over but actually in the non-fiction subjects although it sort of moves around the spectrum people are reading and I think will continue to read good narrative non-fiction.

It's just a fantastic. Do most stores mention me at Barnes and Noble? You have written a good nice lot of books.

Yeah I mean Barnes and Noble couldn't have been more kind and supportive. I have a great one we'll carry on 77WABC in New York and WRCN for an hour. I have a great one over in West Iceland and when I walked into this manager and it's usually corporate and I just said listen when people order from around the country could I make them go to Yale so they can order from my website. I'll go to Yale I'll just show up once a week and personalize it and he said yes. I go no I know you have to check. He goes no I don't.

I can do it. He goes I have a cyber guide that can help me out. I go wait you did this is the first time I heard about your model. He goes no no I think we'd want to do that and sure enough when I did the President Freedom Fighter and it comes out I was showing up signing books once a week and for people to get that personalization only because the Barnes and Noble you that you you actually empowered your managers to make that decision.

If it was the old model it would never have gotten a yes. And it's also a reflection actually that bookstores are places in which readers and writers and authors come together and it is that that connection and I think one of the fascinating bits for me is that hard-working authors who get out there who do events who connect with their readerships who do it virtually on social media and actually physically in stores they're the ones who succeed. Right and and I will say this because I actually you're talking to somebody that has been all literally all over the country. The teams I get from you guys are so impressive because for example you got to set up the podium but I stand. They ask you what do you need? I just need to stand if we just have one line if I could take a picture with everyone and if you could hand me the book.

So we have a system right Allison? We have we have a system where we have one of your workers they hand me the book this way I can talk to them rather than go to the right page and then we take the picture. Nothing like working in a Barnes and Noble you guys are like machine what do you need? We got your notes and we pull it off.

We probably save 45 minutes an hour you know just because people care. Yeah I have to say I've had a few authors who you got a queue going to the back of the store and like the third person in they start talking like 20 minutes later you go no no no no you got a queue you got 80 people to go please. Right I know you feel bad. I've had a few of them. The one thing is you do some of them I don't know I don't want to get them in trouble but some serve alcohol. Do you allow that?

Am I wrong? Did some serve alcohol? I don't think it's been a Barnes and Noble. Not a Barnes and Noble okay I don't want to get you in trouble but that is kind of an advantage. In my own stores I've done that I had one wonderful author who said I will talk for as long as there is a glass of wine in front of me so we put a full bottle in front of me.

After 20 minutes it's empty we have to put up a second one. Oh. Anyway it didn't end well. I wasn't talking about me I wanted people online to have a good time. Well that's true as well. So listen James thanks so much for coming in telling your story if there's one takeaway that you want people listening right now who are bouncing off the pan bouncing out of the pandemic looking for motivation what kind of advice would you offer them? I think reading is a beautiful thing to do and if you've got kids bring them into a bookstore and let them enjoy themselves they don't have to buy anything just enjoy the bookstore because they're great places.

Right and if you get them young they'll have a positive impression the rest of the rest of their lives. That's right. All right James thanks so much great to meet you. Pleasure. Starting February 27th Fox News Podcast presents the True Crime Minute the latest updates on solved and unsolved murders America's most wanted killers missing persons and celebrity crime trials. I'm Laura Ingle join me starting February 27th as we keep you updated on the top true crime stories of the day with new updates every Monday Wednesday and Friday hosted by Fox News correspondent Laura Ingle subscribe and listen now at foxnewspodcasts.com or wherever you get your podcasts the True Crime Minute every Monday Wednesday and Friday get the latest updates on your smart speaker or favorite podcast player listen to the show ad-free on Fox News Podcast Plus on Apple Podcast Amazon Music with your prime membership or subscribe wherever you get your podcasts.