Barnes & Noble CEO James Daunt killed co-op advertising to turn big-box into indies

When James Daunt became CEO of Barnes & Noble in 2019, he didn’t try to “brand” his way out of big-box boredom. He targeted the mechanism that made stores all feel the same: he eliminated “co-op advertising,” the publisher-paid practice that traded discounts and prime shelf space for Barnes & Noble’s agreement to stock and display books at every store. In Fortune’s reporting, Daunt’s framing is blunt: co-op produced “really dispiriting, anodyne stores,” because they sold the same authors, the same bestsellers, and followed the same script instead of what customers wanted to discover.

Daunt says Barnes & Noble “abandoned [co-op advertising] 100%,” so each store curates its own assortment, reorders books based on customer interest, and “does their own thing.” That is the core bet: let stores stop acting like identical warehouses and start behaving like local indie bookstores, where browsing, quirky displays, and knowledgeable staff actually drive the trip. Daunt also ties the “indie feeling” to universal bookstore fundamentals, arguing that a great bookstore is great whether it is a huge chain or a small independent. His checklist is practical: a welcoming environment with appealing displays, an interesting-even quirky assortment, and enthusiastic workers who talk titles with customers.

The “why now” matters because Barnes & Noble’s prior era reads like a warning label. Elliott Advisors took the company private in 2019 for $683 million after sales declines tied to formulaic stores that had lost their charm. Daunt’s hiring was not random. Fortune notes his track record reviving Elliott-owned Waterstones, plus his experience running the ten-store Daunt Books chain in London, suggested he could reverse the “uniformity” problem. In his view, Waterstones had been improving until it suffered from uniformity that bored customers, and the lesson is store independence. What stands in the way, historically, is that the bookselling industry has a long-running incentive stack where publishers help pay discounts in exchange for consistent distribution and prominent placement.

That incentive stack is what Daunt dismantled. With co-op, booksellers could expect revenue certainty, but the trade is operational: managing co-op “occupied a lot of booksellers’ time,” Daunt says, and it pulled them away from the hands-on service that is supposed to differentiate Barnes & Noble from buying books on Amazon. There is a second order effect embedded in that: when employees are busy administering program mechanics, they have less time for customer-facing work like recommendations. Daunt’s plan shifts the day-to-day incentive. It gives local teams the levers to decide inventory and presentation, and then expects the store environment to do what the HQ-approved plan couldn’t: create discovery.

Daunt backs that discovery strategy with a specific ordering approach. Fortune reports that he started placing smaller initial orders of books, even for titles expected to sell well, while ordering more titles overall with the goal of carrying a wider selection. The intended outcome is behavioral, not just assortment: customers should feel that Barnes & Noble is a place to find something new, not just a place to buy the same bestseller everyone already saw online. For employees, it also changes the work experience, because a larger variety of local selections can make store work more interesting, which matters in an industry where staffing quality is part of the “product.”

The capital and board context is what makes this more than a feel-good bookstore makeover. Barnes & Noble is a private company, so it does not disclose financial information, and Daunt declined to discuss a potential listing. Still, Fortune points to reports of a possible IPO and store growth as indicators that the company is on firmer footing compared to the 2010s when it looked doomed by the fate of Borders. In that era, Barnes & Noble saw massive sales declines, closed more than 100 stores, went through six chief executives, and lost $1 billion on its Nook e-reader, which it hoped would compete with Amazon’s Kindle. Those missteps also drained the company of financial firepower needed to upgrade stores, meaning the “product refresh” had to be paired with operational changes.

Now, the Elliott confidence signal is tangible. Fortune says Daunt’s strategies have given Elliott the confidence to open dozens of new stores annually for the past three years, including 50 this past year, with more to come. The store count is approaching the all-time high of nearly 800 from the mid 2000s, though many of the new locations are much smaller than the big boxes it shuttered last decade. Alongside the independence shift, Barnes & Noble has remodeled locations, installing modular shelving, improving lighting, and reorganizing how books are presented. Fortune also notes that multiple media outlets reported this spring that Elliott was eyeing an initial public offering for the combined company holding Barnes & Noble and Waterstones, which would value the company at $4 billion. If that happens, it would be a market-level endorsement that the “indie-like” merchandising system can translate into durable economics.

The ecosystem around it supports the narrative, but not in the easy way you might assume. For decades, Barnes & Noble was accused of killing mom-and-pop bookstores across the U.S., and Daunt argues that the big-box store end-of-indies trope is expected and wrong. According to the American Booksellers Association, some 605 new independent bookstores opened in the U.S. in 2025, up 87% from the year before. Meanwhile, book sales are not growing nearly as fast: revenues for the industry hit $14.6 billion in 2025, up 1.1% from 2024, according to the Association of American Publishers. Daunt’s logic is that better bookstores expand the market rather than simply redistribute it. He says, “The better our bookstores, the more books are sold, the more the market expands,” adding, “It’s not a zero-sum game.”

Still, the story does not pretend execution is all warm oak panels. Daunt, a former investment banker working for a private-equity owned company, is described as capable of harsh steps when he sees fit. The Wall Street Journal reported in May that at one point he made his entire corporate staff reapply for their jobs and let a few dozen employees go. And even in a single store tour, the operational detail is about what travels from strategy to shelf. Daunt calls the Union Square store dated because it opened in 1995, a “work in progress,” and points to small choices that enhance browsing: staff notes explaining why books are good reads, and a table at the entrance with dozens of books arranged by theme such as current affairs and income inequality, hand-picked by store staff rather than imposed by HQ. He also describes the grouping goal in customer terms: you should walk away with two, three, four, five books, not one book or no books.

For executives and boards watching retail and media trends collide, Barnes & Noble’s pivot is a real-time case study in how to compete when online convenience is winning the clicks. It suggests that the differentiator may not be deeper discounts or more marketing, but faster learning loops at the store level, fewer centrally mandated programs, and merchandising that treats customers like humans who browse. Whether or not you’re in books, the strategic stakes are the same: when a business model has been optimized for supply chain certainty, changing it requires removing incentive structures that force uniformity. Daunt chose to do that, and the early signals, including store growth and board backing, indicate the bet is landing.