Barnes & Noble buying Tattered Cover for $1.8M

Tattered1

The Tattered Cover bookstore on East Colfax Avenue in Denver on Thursday, April 25, 2024. (Andy Cross/The Denver Post)

Tattered Cover, the beloved Denver bookstore chain that survived decades of industry chaos and consolidation with its independence firmly intact, will be indie no longer.

Pending approval from a judge, the company will be sold to Barnes & Noble for $1.8 million, its lawyers told the U.S. Bankruptcy Court late Monday. BusinessDen first reported Thursday that Barnes & Noble was the top bidder. There were two others, Tattered Cover said.

“The proposed sale enables Tattered Cover to operate from a more stable financial and technological platform and will propel its role and legacy as an iconic Colorado bookseller into the future,” the company wrote in asking Judge Michael Romero to approve the sale.

Barnes & Noble will keep the Tattered Cover name and will keep all four locations, according to Tattered Cover. It will also keep all or nearly all of Tattered Cover’s 70 employees.

Kwame Spearman, who was the CEO of Tattered Cover between 2021 and early 2023, said Monday night that he and a colleague submitted one of the two losing bids last week. Barnes & Noble’s bid was “significantly larger than ours,” according to Spearman.

“At first blush, this move takes away the independence that Tattered and Coloradans have cherished about this iconic bookstore,” the former CEO told BusinessDen.

“While it is important that the business will continue to operate, it is disheartening to see Colorado lose its independently owned and managed bookstore.”

Anyone objecting to the sale will now have until July 2 to do so. Romero will then decide whether to approve it and end the Chapter 11 bankruptcy case of Tattered Cover.

The expected sale is a setback for the independent bookselling industry, which is proud of its survival in the shadow of industry giants such as Amazon and Barnes & Noble, and is sure to frustrate some employees and customers who have remained loyal to the local chain.

Tattered Cover was founded in Cherry Creek in 1971 and was purchased three years later by Joyce Meskis, who built it into a Denver institution and one of the country’s premier independent bookstores before selling it in 2015. Meskis died in late 2022 at 80.

Since changing owners in 2020, Tattered Cover has struggled. Years of financial losses led to unpaid bills, soiling the company’s reputation with publishers and wholesalers. Fearful it would be unable to stock its shelves before the 2023 holiday season, and needing to keep creditors at bay in the meantime, Tattered Cover filed for Chapter 11 bankruptcy last October.

Under the leadership of CEO Brad Dempsey, who is also a bankruptcy attorney, the company quickly closed three locations and laid off one-fourth of its employees. It has been kept afloat by $700,000 in loans from Read Colorado LLC, a company that was formed last fall by Dr. Leslie Rainbolt and philanthropist Margie Gart in order to help Tattered Cover.

“At this point, there is no sale contemplated for the company,” Dempsey said Nov. 17.

But that changed as 2023 turned to 2024 and, with the notable exception of December, Tattered Cover continued losing money each month. It went on the market in late March and by mid-May there were eight interested parties. Three placed bids before a June 10 deadline.

As it negotiated with Barnes & Noble, Tattered Cover canceled an auction that was to happen last Wednesday. A company spokesman said then, “We remain quite hopeful that Tattered Cover is going to secure new ownership that believes in its mission and values.”

Barnes & Noble is the country’s largest bookstore chain with 600 locations across all 50 states. It is owned by Elliott Investment Management, which paid $683 million for it in 2019.

Tattered1

The Tattered Cover bookstore on East Colfax Avenue in Denver on Thursday, April 25, 2024. (Andy Cross/The Denver Post)

Tattered Cover, the beloved Denver bookstore chain that survived decades of industry chaos and consolidation with its independence firmly intact, will be indie no longer.

Pending approval from a judge, the company will be sold to Barnes & Noble for $1.8 million, its lawyers told the U.S. Bankruptcy Court late Monday. BusinessDen first reported Thursday that Barnes & Noble was the top bidder. There were two others, Tattered Cover said.

“The proposed sale enables Tattered Cover to operate from a more stable financial and technological platform and will propel its role and legacy as an iconic Colorado bookseller into the future,” the company wrote in asking Judge Michael Romero to approve the sale.

Barnes & Noble will keep the Tattered Cover name and will keep all four locations, according to Tattered Cover. It will also keep all or nearly all of Tattered Cover’s 70 employees.

Kwame Spearman, who was the CEO of Tattered Cover between 2021 and early 2023, said Monday night that he and a colleague submitted one of the two losing bids last week. Barnes & Noble’s bid was “significantly larger than ours,” according to Spearman.

“At first blush, this move takes away the independence that Tattered and Coloradans have cherished about this iconic bookstore,” the former CEO told BusinessDen.

“While it is important that the business will continue to operate, it is disheartening to see Colorado lose its independently owned and managed bookstore.”

Anyone objecting to the sale will now have until July 2 to do so. Romero will then decide whether to approve it and end the Chapter 11 bankruptcy case of Tattered Cover.

The expected sale is a setback for the independent bookselling industry, which is proud of its survival in the shadow of industry giants such as Amazon and Barnes & Noble, and is sure to frustrate some employees and customers who have remained loyal to the local chain.

Tattered Cover was founded in Cherry Creek in 1971 and was purchased three years later by Joyce Meskis, who built it into a Denver institution and one of the country’s premier independent bookstores before selling it in 2015. Meskis died in late 2022 at 80.

Since changing owners in 2020, Tattered Cover has struggled. Years of financial losses led to unpaid bills, soiling the company’s reputation with publishers and wholesalers. Fearful it would be unable to stock its shelves before the 2023 holiday season, and needing to keep creditors at bay in the meantime, Tattered Cover filed for Chapter 11 bankruptcy last October.

Under the leadership of CEO Brad Dempsey, who is also a bankruptcy attorney, the company quickly closed three locations and laid off one-fourth of its employees. It has been kept afloat by $700,000 in loans from Read Colorado LLC, a company that was formed last fall by Dr. Leslie Rainbolt and philanthropist Margie Gart in order to help Tattered Cover.

“At this point, there is no sale contemplated for the company,” Dempsey said Nov. 17.

But that changed as 2023 turned to 2024 and, with the notable exception of December, Tattered Cover continued losing money each month. It went on the market in late March and by mid-May there were eight interested parties. Three placed bids before a June 10 deadline.

As it negotiated with Barnes & Noble, Tattered Cover canceled an auction that was to happen last Wednesday. A company spokesman said then, “We remain quite hopeful that Tattered Cover is going to secure new ownership that believes in its mission and values.”

Barnes & Noble is the country’s largest bookstore chain with 600 locations across all 50 states. It is owned by Elliott Investment Management, which paid $683 million for it in 2019.

Your subscription has expired. Renew now by choosing a subscription below!

For more informaiton, head over to your profile.

Profile


SUBSCRIBE NOW

 — 

 — 

 — 

TERMS OF SERVICE:

ALL MEMBERSHIPS RENEW AUTOMATICALLY. YOU WILL BE CHARGED FOR A 1 YEAR MEMBERSHIP RENEWAL AT THE RATE IN EFFECT AT THAT TIME UNLESS YOU CANCEL YOUR MEMBERSHIP BY LOGGING IN OR BY CONTACTING [email protected].

ALL CHARGES FOR MONTHLY OR ANNUAL MEMBERSHIPS ARE NONREFUNDABLE.

EACH MEMBERSHIP WILL ONLY FUNCTION ON UP TO 3 MACHINES. ACCOUNTS ABUSING THAT LIMIT WILL BE DISCONTINUED.

FOR ASSISTANCE WITH YOUR MEMBERSHIP PLEASE EMAIL [email protected]




Return to Homepage

POSTED IN Retail,

Editor's Picks

Comments are closed.