When James Daunt was appointed CEO of Barnes & Noble in 2019, he moved swiftly to reshape the big-box retailer in the image of independent bookshops.

Barnes & Noble had recently been taken private by Elliott Advisors in a $683 million acquisition, following years of declining sales tied to formulaic store layouts that had lost their appeal. The hedge fund selected Daunt—a British bookseller—based on his successful turnaround of Elliott-owned Waterstones, a major U.K. bookseller, and his ownership of the cherished ten-location Daunt Books chain in London.

His turnaround strategy centered on imbuing Barnes & Noble's more than 700 stores with the qualities that made his namesake shops revered destinations among book enthusiasts—renowned for their browsable displays and oak-paneled interiors.

"There are universal factors that make a great bookstore, and it doesn't matter whether it's a huge chain store or a small independent," Daunt told Fortune in a new installment of the "Behind the Business" series.

A great bookstore, in his view, requires an inviting atmosphere with attractive displays, a diverse and sometimes unconventional book selection, and passionate, well-informed staff who enjoy discussing titles with customers. Early in his tenure, Daunt identified that Barnes & Noble—much like Waterstones before its own revival—was hampered by a stifling uniformity. Stores needed far greater autonomy over inventory selection and merchandising.

A deeply entrenched industry practice stood in the way. For years, publishers offered Barnes & Noble discounts on books in exchange for guaranteed placement and premium shelf space across all locations. This system, known as "co-op advertising," was among the first things Daunt dismantled. The practice was not unique to Barnes & Noble—co-op arrangements have long shaped how books surface across American retail, influencing not only what customers see but which titles receive national visibility.

Co-op advertising had provided some revenue predictability, but administering it consumed significant staff time, Daunt explains. It made booksellers' roles monotonous and diverted them from customers at a moment when personalized service was meant to differentiate Barnes & Noble from Amazon, which has grown to dominate U.S. book sales across both print and digital formats.

"It created these really dispiriting, anodyne stores because they were all the same, selling the same old books, the same authors, the same bestsellers," Daunt recalls. "We just said, 'No more of that.' We're going to choose what we sell."

"We," critically, no longer referred to Barnes & Noble's New York headquarters. Instead, the company delegated broad authority over shelving decisions to small regional clusters of stores.

"We abandoned [co-op advertising] 100% so now each store curates its own assortment, reorders books according to what its customers are actually interested in and does their own thing," he says. Customers on Manhattan's Upper East Side and those in Flint, Michigan, have different reading preferences, the CEO notes.

In another significant shift, Daunt began placing smaller initial book orders—even for titles expected to perform well—while increasing the total number of titles carried, aiming for a broader selection. This fostered a perception among customers that Barnes & Noble was a place of literary discovery. For employees, it made the stores more engaging workplaces.

As a private company, Barnes & Noble does not release financial data. However, reports of a potential IPO and sustained store growth suggest a far stronger position than during the 2010s, when the chain appeared headed toward the same fate as the now-defunct Borders, which liquidated in 2011 after its own struggles with digital adaptation. During that period, Barnes & Noble experienced steep revenue declines, shuttered over 100 locations, cycled through six chief executives, and absorbed a $1 billion loss on its Nook e-reader, which was intended to compete with Amazon's Kindle. Those missteps left stores understaffed and stripped the company of resources to invest in upgrades.

Daunt's strategies have since given Elliott the confidence to open dozens of new Barnes & Noble locations annually for the past three years, including 50 in the most recent year, with additional openings planned. The chain's store count is nearing its mid-2000s peak of approximately 800, though many newer locations are considerably smaller than the large-format stores closed over the past decade. Barnes & Noble has also renovated numerous locations, installing modular shelving, upgrading lighting, and rethinking book presentation.

Multiple media outlets reported this spring that Elliott was considering an initial public offering for the combined Barnes & Noble and Waterstones entity, with a potential valuation of $4 billion. A listing would offer the first public window into the financial performance of Daunt's transformation. Daunt declined to comment on a possible listing.

Barnes & Noble has undergone expansion cycles in the past, particularly during the boom years of the 1990s and 2000s. What distinguishes the current moment is that the chain's growth coincides with a resurgence of independent bookstores. For decades, Barnes & Noble faced accusations of driving small bookshops out of business across the United States. That dynamic has shifted: according to the American Booksellers Association, approximately 605 new independent bookstores opened in the U.S. in 2025, an 87% increase over the prior year.

Overall book sales, by contrast, are growing at a far more modest pace. Industry revenue reached $14.6 billion in 2025, a 1.1% rise from 2024, according to the Association of American Publishers.

Daunt dismisses the notion that big-box retailers inevitably doom independent shops—a perspective perhaps unsurprising given his involvement in both formats—and expresses no surprise that indie stores are thriving alongside Barnes & Noble's recovery.

"The better our bookstores, the more books are sold, the more the market expands," he says. "It's not a zero-sum game."

The former investment banker, who leads a private-equity-owned company, has nonetheless shown willingness to make difficult decisions. The Wall Street Journal reported in May that at one point, Daunt required his entire corporate staff to reapply for their positions and released several dozen employees.

Another central element of his strategy involves continuing to upgrade existing stores and reopening locations in markets Barnes & Noble vacated during its 2010s contraction. Walking through the chain's expansive Union Square store—which he describes as "dated" (it opened in 1995) and a "work in progress"—he highlights small touches that elevate the browsing experience. Some displays include brief staff notes recommending specific titles, a personal flourish reminiscent of an independent shop. A table near the entrance showcases dozens of books organized by theme, such as current affairs and income inequality, selected by store employees rather than headquarters.

Daunt sees potential in the Union Square location. "It takes time, it takes intelligence," he says of curating book groupings to encourage multiple purchases. "These are great books. You'll walk away with two, three, four, five books, not just one book or no books."

This story was originally featured on Fortune.com.