American book retailer Barnes & Noble has been purchased in an all-cash transaction by Elliott Advisors for $683 million. The official announcement was made on the morning of June 7th. This deal marks the second purchase of a major bookseller by the hedge fund, following their purchase of UK bookseller Waterstones in 2018. The purchase of Barnes & Noble will take the company from public shareholder to private, at a cost of $6.50 per share. This deal will include the installation of James Daunt as CEO, who has been CEO of Waterstones since 2011. 

But what changes can we expect this to bring to Barnes & Noble?

James Daunt was already showing great success with Waterstones before its purchase by Elliot Management in the spring of last year.  Under Daunt’s leadership, the company enjoyed an 80% jump in sales in 2017. Prior to Daunt’s leadership, it was thought that Waterstones might be forced to shut its doors entirely, under the weight of Amazon’s global monopoly. 

Waterstones’ growth despite the odds only continues after its purchase by the Elliott Advisors, also known as Elliott Management Corporation. One could argue this is again due to James Daunt; Elliot elected to keep in place CEO James Daunt and his “key leadership team.” Fears of mass layoffs were assuaged as the firm instead opened new bookstores.  

On paper, this all looks very well and good. Waterstones, which once failed to turn a profit for over eight years, is thriving. This should in turn predict a fantastic turnaround for the ailing Barnes & Noble. However, the employees who make such profits possible tell another story entirely. 

Today, Waterstones employees fight for a living wage, which Waterstones says is not profitable. Daunt says the store cannot afford the 5 million pounds it would cost to raise the wages. In a quote to the Guardian, James Daunt stated that, “we have to reward them, and we reward them as well as we can with pay, but we mainly reward them with a stimulating job.”

On April 8, 2019, a group of Waterstones employees responded by delivering a petition with 9,300 signatures to the company’s headquarters in London. The document called for the introduction of a living wage of 9 pounds, which employees claim is “the financial recognition deserving of their skill, passion, expertise and hard work.” To date, at least 1,900 of Waterstones’ 3,100 employees are paid less than a living wage. 

Upon receiving the petition, a Waterstones spokesperson was quoted as saying: “James Daunt will be very pleased to receive the petition. We are all in agreement, after all, that it is important to raise the pay of booksellers. The question of whether it is more important to raise the pay of entry-level booksellers to the ‘real’ living wage, or more important to raise that of booksellers committing to careers at Waterstones, remains a difficult one. We think we have to prioritise our more experienced booksellers but welcome the debate.”

At the present, no such priority is being given to committed booksellers at Waterstones. Employees at Waterstones have banded together to publish a document titled Working at Waterstones, which consists entirely of anonymous employee testimonies admonishing the poor pay and benefits offered by the bookseller. One such testimony states that an employee of 18 years left Waterstones due to being paid the same wage they had when they started their employment.

CEO James Daunt is Waterstones’ highest paid director, with a salary of 1.6 million pounds last year. 

James Daunt failed to comment on Waterstones’ employee difficulties during his interview on what’s next for Barnes & Noble. Instead, James Daunt commented that they needed to “get out of the booksellers’ way and let them do their job.” One of the many tactics Waterstones has employed is allowing each store autonomy. Rather than forcing all Waterstones stores to adhere to company wide sales tactics, each store varies to meet the needs of its audience. 

However, the US is not the UK. Daunt admits that applying this process to Barnes & Noble will not be easy, saying that, “A customer walking into the Union Square flagship store, a store in Boston, or one in Jacksonville, may all want different things—and I’ll be honest here, I haven’t a clue what the customer in Jacksonville is like.”

This is certainly a wiser choice than banking on the Nook, the tried and failed strategy of past CEOs of Barnes & Noble, but can a UK bookseller crack a divided US market? And at what cost?

Only time will tell. 

James Daunt and Elliott Advisors are set to begin taking the helm of Barnes & Noble during the third quarter, as early as July 1st. 


Author’s note: A recent development included the possible sale of Barnes & Noble to Readerlink (responsible for book distribution to non-book retailers such as Target and Walmart). As of June 14th, Readerlink failed to make the midnight deadline. Further attempts to purchase B&N out from under Elliot are unlikely. The sale includes a “keep-shop” proviso, a fee which now mounts to $17.5 million.  

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