Why Barnes & Noble is buying indie chains like Books Inc. and Tattered Cover

The acquisitions are reflective of Barnes & Noble’s turnaround under CEO James Daunt, who has increasingly borrowed from the playbook of independents themselves. Since 2019, Daunt has pushed to decentralize buying decisions, empower local managers and run each store with its own character — for example, letting individual locations decide which titles to stock and how to merchandise them — Modern Retail previously reported. By absorbing struggling indie chains while preserving their identities — and backing them with national resources, Barnes & Noble is positioning itself not as a big-box competitor to independents but as a steward of bookstores that may otherwise vanish.

Founded during California’s Gold Rush in 1851, Books Inc. has endured fires, ownership changes, multiple bankruptcies and decades of industry upheaval to become known as the West Coast’s oldest independent bookseller, according to the company’s website. It emerged from Chapter 11 in the 1990s with just four stores and rebuilt itself into a network of 11 locations.

Meanwhile, Tattered Cover, founded in Denver in 1971, has long been a cultural landmark known for its robust calendar of author events and deep community roots. For a time, it also held the distinction of being the largest Black-owned independent bookstore in the U.S. before Barnes & Noble acquired it.

“This is very much not Barnes & Noble roaming the countryside, looking for great indie bookstore chains and acquiring them,” Daunt said in an interview. “These are very storied and rather remarkable bookstore chains, which, for all sorts of reasons, have gone bankrupt and are closing — literally closing their doors and disappearing — and we’re providing them a safe harbor, which we think is a worthwhile and important thing to do.”

Preserving the indie identity

For Barnes & Noble, its acquisition of Books Inc. adds to its rapidly growing fleet of 600 stores. In 2024 alone, after a decade of falling sales and store closures, the company opened 57 new stores across the U.S. — the most in a single year in nearly two decades. Barnes & Noble plans to open 60 more in 2025, not including Books Inc.’s locations.

Still, Daunt said the acquisitions are less about empire-building than about rewriting Barnes & Noble’s role in the industry. Daunt said that Books Inc. will operate autonomously, much like Tattered Cover has since its acquisition. He said the stores will gain access to Barnes & Noble’s distribution network and upgraded technology. But day-to-day decisions, including inventory curation, will remain squarely with the local bookselling teams. On staffing, Daunt said there will be no Barnes & Noble personnel embedded in Books Inc. operations, and current leadership will remain in place.

As he told employees: “You, the bookselling team, need to get on and curate your stores and make them a really good bookstore again, and you no longer have financial impediment to doing that.”

That philosophy echoes the approach Daunt described earlier this year, when he told Modern Retail that Barnes & Noble’s years of flagging sales weren’t because of the irrelevance of physical bookstores but instead the fact that the chain “wasn’t running good enough bookstores.” The chain has reversed its fortunes under Daunt’s leadership. By ceding control to local staff, Barnes & Noble has reduced costly book returns, improved store curation and spurred a wave of new openings. Sales are growing in the mid-single digits compared to 2021.

Barnes & Noble sees Tattered Cover as a model for what success could look like for Books Inc. While he declined to share specific figures, Daunt said the Colorado chain is now back to pre-Covid sales levels and climbing. Stores have rebuilt inventory, boosted traffic and restored morale among staff who had once feared for their jobs.

“Their sales have gone up a lot and continue to rise really, really sharply,” Daunt said. “Customers are enjoying it and buying an awful lot more books from them.”

Growing the market

Even though Amazon’s dominance once threatened Barnes & Noble’s survival, Daunt said he views the acquisitions not as a fight for market share with the e-commerce giant or other retailers, but as a way to expand the bookselling market.

“The bookselling market is not a static one,” he said. “When you’ve got more bookstores in communities and more availability, there are more people engaged with books and with reading. We expand the market.”

With two indie chains now under its wing and dozens of new Barnes & Noble locations opening annually, the company is betting that the appetite for physical bookstores is only growing. Daunt even suggested that Books Inc. could help Barnes & Noble refine its playbook for smaller formats. That strategy has already been mastered at Waterstones, the U.K. bookstore chain owned by parent company Elliott Investment Management, but not yet in the U.S.

“Books Inc. actually will give us a very good example of how to do it, which hopefully will unlock a few things,” he said.

According to Melissa Minkow, director of retail strategy at CI&T, Barnes & Noble’s recent buying spree underscores how the indie format itself has become more relevant.

“This is clearly a demonstration of the fact that there is demand from people to consume books in physical form in physical places,” she said. “For so long, it was believed that that was somewhat irrelevant and not what people wanted anymore because of Amazon. Clearly, that’s not the case.” Indeed, Amazon itself, despite conquering online book sales, has failed to crack the code of physical stores.

Minkow added that Books Inc.’s small footprint could play to its advantage, since shoppers are increasingly seeking out “third spaces” — community-driven environments beyond home and work. “Especially now that we’re five years out from Covid, and people are going back to work and people are looking to socialize and figure out what a less remote life looks like, the community aspect here will be really important,” she said.