Daunt is explaining why he took on Barnes & Noble when its sales were cratering and Amazon looked unbeatable. He grants that Amazon sells a book efficiently, then makes the claim the whole turnaround rests on: that where you found it changes the object itself. Straight after, he describes pitching the deal to private equity firms who all said no.
One, an arrogance that I felt that I could sort it out, that this was totally unnecessary. The sales in my own store were going up. The sales in theirs were cratering. Every one of their stores I went into was really awful and getting worse. So I knew that I could really turn it around and make it so much better. I also knew if they disappeared, then I could open up more stores, but I was never going to open up 300 stores and I was never going to open up the size and scale of the stores that Walterston's had. So if you could keep it all together, you got your 300 stores and you would keep all these communities with bookstores. And that seemed worth doing.
And so you had courage of conviction based on your experience with your chain of independent stores that you could apply the same logic to a much bigger set of stores and turn it around and get growth back.
Yes, and loss of confidence that was going on. Largely in the face of Amazon. It was misplaced. Bookstores are different to Amazon. Amazon will sell you a book extremely efficiently and great and all wonderful. And we all know how to do that. But at the end of the day, a book bought in a bookstore, discovered in a bookstore is a better book. Same book, but it's a better book. And also, it's just nice and enjoyable. These are places in which people will want to continue to come. And the loss of confidence just needed to be reversed. We needed to get our booksellers to believe that they could run good bookstores. And then our customers would come back and we'd be okay.
How did you go about finding an investor to put the money behind you to go make this happen?
I went around private equity firms and the like, and I said, Here's this great idea and invest your money and it will come back in multiples and you will all be happy and I'll be happy and you don't have to put very much in. And don't you think that's a good idea? And everybody said no. But one of them rang me up and said, you know, I've just met a Russian. In fact, he's having a cup of tea with me. Get on your cycle, put your helmet on, pedal over here and meet him because that'll be fun anyway. But you can pitch to him. And very sensibly and very agreeably, after about 40 minutes, maybe 35 minutes, this Russian entrepreneur said, yeah, okay, go ahead.
Wow. Were you at all concerned that he might not be the right partner for you? Was there any