The rise and fall — and rise again — of Barnes & Noble

Barnes & Noble can trace its roots back to 1873, when Charles Barnes opened a bookselling business out of his home in Wheaton, Illinois. Over 40 years later, his son, William, moved to New York City and joined forces with G. Clifford Noble, establishing Barnes & Noble.

Source: Barnes & Noble

Barnes & Noble opened its flagship store on New York City's Fifth Avenue in 1932, in the midst of the Great Depression. The bookseller still operates a store in that neighborhood today, right near Union Square.

Source: The Encyclopedia of New York State

In 1971, Barnes & Noble was acquired by Leonard Riggio. Riggio had gotten his start working at the New York University bookstore while he was a student. He later dropped out and opened his own bookstore at age 24. Six years later, he borrowed $1.2 million to buy what was then just a single Barnes & Noble store.

Source: New York Magazine

Riggio brought his family members into the business: His dad ran the office, and his brothers Jimi and Steve worked in the store. Fast-forward to the late 1990s, and Steve was serving as Barnes & Noble's vice chairman (and eventual CEO), while Jimi ran a trucking business that shipped the company's books.

Source: New York Magazine

Five years after buying the business, Riggio had boosted annual sales from $1 million to $10 million, he told New York Magazine in 1999. He was making headlines for adding perks like customer telephones and bathrooms to the store, which made shoppers want to linger.

Source: New York Magazine

A turning point for Barnes & Noble arrived in the mid-1980s when Riggio met Anton Dreesmann, the CEO of Vendex International, a Dutch retail giant. Riggio convinced him to invest, and Dreesmann paid $18 million for a 30% stake in the business. The cash infusion allowed Riggio to start thinking about expanding the business.

Source: New York Magazine

In 1987, Barnes & Noble became the nation's second-largest bookstore overnight when it purchased B. Dalton Bookseller, a national chain made up of 797 stores. Other acquisitions followed, including Doubleday Book Shops and BookStop. Barnes & Noble went public in 1993.

Source: Barnes & Noble

Barnes & Noble as we know it today was born in the late 1990s, when Riggio launched the superstore. The hallmarks? A massive footprint; a wide selection of books, music, and toys; and a comfortable atmosphere that encouraged customers to stay awhile.

Source: Barnes & Noble

By 1999, Barnes & Noble operated 520 superstores nationwide, plus 465 B. Dalton stores. The company owned roughly a quarter of the nation's bookstore market, and one out of every eight trade books sold in the US were purchased at a Barnes & Noble.

Source: New York Magazine

But Barnes & Noble's reputation was taking something of a hit: small, independent bookstores were being edged out by the superstores, which were able to strike deals with publishing houses, sell more copies of books, and in some cases, had better economies of scale. In the late '90s, the tension between bookstores and Barnes & Noble was so intense, it inspired Nora Ephron's 1998 film "You've Got Mail."

Source: New York Magazine

Independent bookstores weren't Barnes & Noble's only competition: Borders, a bookselling chain founded in Michigan in 1971, had opened hundreds of stores in the US and abroad. Borders' edge was in its inventory management system, which was able to predict what customers would buy.

Source: NPR

But Borders made some missteps, including betting big on CDs and DVDs and opting not to invest in starting up an e-commerce business, instead outsourcing it to an upstart new company: Amazon.com.

Source: NPR

By 2011, Borders had filed for bankruptcy, laid off 11,000 employees, and closed its remaining 400 stores. Barnes & Noble later purchased the Borders trademark for $13.9 million.

Source: NPR, Boston Business Journal

Meanwhile, that fledgling new challenger, Amazon.com, had entered the field. Jeff Bezos' bookselling website had launched in 1995 and quickly become a threat to Barnes & Noble's business. The site was selling $110 million worth of books per year by 1997 and had made its stock market debut.

Source: Fortune, New York Magazine

Amazon's founder, Jeff Bezos, then 35, was painted as a hip entrepreneur with his finger on the pulse of what young consumers wanted. Riggio and Barnes & Noble, by comparison, were the Goliath to Bezos' David.

Source: The New York Times

But Barnes & Noble had moved online too. The company hired Silicon Valley web designers to build barnesandnoble.com, launching with a 30% discount on all hardcover books — a discount Amazon was forced to match.

Source: Fortune

In 2004, Barnes & Noble sold back its shares in its video game business and spun it out into a separate company: GameStop. "Owning major stakes in businesses that had separate stocks was confusing for investors," Riggio told The Wall Street Journal at the time. "People don't like retail conglomerates. This creates greater clarity."

Source: The Wall Street Journal

Barnes & Noble entered the e-reader market in 2009 with the launch of its own device, the Nook. Amazon had beaten Barnes & Noble to the punch with the launch of the Kindle two years prior.

Source: Barnes & Noble

The 2010s were tumultuous for the chain, which experienced declining sales, a falling stock price, and executive turmoil, including a sexual harassment scandal. Barnes & Noble closed its original Fifth Avenue store in 2014, and roughly 150 others between 2008 and 2018.

Source: The New York Times, Crain's New York Business

In 2018, the bookseller laid off 1,800 employees, and by the end of the year, it had reported seven straight quarters of losses. One year later, the company was bought by hedge fund Elliott Advisors for $638 million and James Daunt, the chief exec of British bookstore chain Waterstones, was named CEO.

Source: TechCrunch, Los Angeles Times, The New York Times

Then the pandemic hit. Like other retailers, the company had to temporarily shutter hundreds of its stores, but it ended up being an unexpected boon for Barnes & Noble's business. The bookseller used the closures as an opportunity to revamp its stores, which had gotten "a bit ugly" over the years, Daunt told The New York Times.

Source: The New York Times

Plus, book sales had started rebounding after years of slowed growth. "The pandemic was very good for reading," Daunt recently told The Times. "You force people to spend a lot of time at home, and at some point the TV becomes dull."

Source: Insider, The New York Times

Daunt instituted other changes, too. He started letting individual stores make decisions about which books to carry; cut back on the random products stocked at stores; started stocking more titles from highly popular genres like manga; and stopped accepting money from publishers to place books in prominent spots, which had caused expensive headaches, he told The Times.

Source: The New York Times

By 2022, sales were up 3% compared to pre-pandemic levels and book sales were up 14%. And after more than a decade of shrinking its store fleet, Barnes & Noble is growing once again: The company announced in late 2022 that it plans to add 30 new stores in the coming year.

Source: The New York Times, The Wall Street Journal

The company announced in February that it's launching a new $40-a-year membership program, not unlike Amazon's and Walmart's programs, that will offer discounts on books, free shipping, a new tote bag each year, and upgrades on drinks at the bookstore cafes.

Source: The Wall Street Journal