How Barnes & Noble made a comeback, with CEO James Daunt

**Jeff Berman** (0:01)
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**James Daunt** (1:31)
We really need to put in lots of filters to try and keep the AI rubbish out.
There is going to come a time perhaps when these books come through, we would ask publishers to the extent that they know that they indicate where the books are of AI, assisted AI written completely. And then we can indicate that to customers. But we are booksellers. If customers want to read particular books, we will sell them. And then everybody starts shouting at me to say that I'll only sell AI books and that's all I want. But that isn't true. We feel a deep, natural suspicion of it.

**Jeff Berman** (2:17)
This is Masters of Scale. I'm Jeff Berman, your host.
Today we have the leader who has taken on the daunting task of turning around Barnes & Noble and doing it with flying colors. I have been looking forward to this conversation for some time. Welcome to Masters of Scale, James Daunt.

**James Daunt** (2:38)
Thank you very much.

**Jeff Berman** (2:39)
I'm thrilled to have you for so many reasons, not least of which being, I happened to be in London this spring. We made a point of going to one bookstore and one bookstore only. It bears your name. We probably spent 90 minutes there, walked out with far too many books to schlep back across the pond. But I'm an avid reader. I've gotten Instagram just for my books.
I'd love to start with where this comes from. You had a burgeoning career in finance. You could obviously have gone and done any number of things, and you sort of tossed it all aside to go open a bookstore. What happened?

**James Daunt** (3:15)
I think burgeoning career is quite flattering. I don't suppose any of my then colleagues will remember it quite as that. I was extremely young when I wanted to do something that married with my interests and I read a lot. So I settled on a bookstore and there I got stuck actually quite early on.

**Jeff Berman** (3:33)
What do you mean you got stuck?

**James Daunt** (3:35)
Well, you set up a business and I think when you're young and I was extremely young, you think, well, I'll try this and if it doesn't work, I'll go back and do something else. But actually, as soon as you're embedded in something, you get all sorts of obligations.
I had investors, so I then had the obligation of paying them back their investments or the embarrassment of losing their money. And you're employing people quite quickly and then you have those obligations and that in some ways is a trap. And certainly early on, I think I probably felt it to be a trap because at the beginning, we weren't successful.

**Jeff Berman** (4:11)
What do you mean you weren't successful in the beginning?

**James Daunt** (4:12)
I opened the store in 1990, the first Gulf War happened, there was a recession, our neighboring stores all closed down. We simply didn't have enough business to pay the rent.
And then you have to work all hours at Godgives and scrimp and decide whose bill you're going to pay and whose you're not. And all of that can become quite difficult.

**Jeff Berman** (4:32)
What got you through it and then what turned the corner for you?

**James Daunt** (4:36)
Probably stubbornness and application. I think there are many people who've set up businesses who probably have had the same experience.
And then slowly it began to work. And in fact, our sales grew every single month that I was open from the moment I was open. So that just got over the tipping point, probably after about three or four years. We were under water by 10% and then we were under water by 6% and then we were flat and then we were above and then we could breathe.