Bookselling giant Barnes & Noble is set to become the next owner of longstanding Denver bookstore Tattered Cover, marking the end of its 53-year run as an independent business.
Tattered Cover has faced a difficult financial situation in recent years. The local bookstore chain has been staving off bankruptcy for years under two different owners. It finally filed for Chapter 11 bankruptcy last October, closing three locations and laying off nearly 30 workers in the process.
Since then, owner Bended Page LLC has been exploring its options to resolve about $3.4 million in unsecured debt and once again become profitable. In March, the U.S. Bankruptcy Court in Colorado allowed Tattered Cover to reschedule bankruptcy hearings so it could continue talks with potential buyers.
Tattered Cover was due to hold an auction last Wednesday to hear bids to buy the bookstore and its assets, but it canceled the event at the last minute. A source familiar with the matter told Denverite last week that Tattered Cover has received three serious bids of varying amounts.
One of those bids came from Barnes & Noble, the last remaining national bookstore chain in the United States.
Barnes & Noble bid over $1.8 million to obtain Tattered Cover’s five existing locations and its inventory, which Tattered Cover formally accepted Monday evening. Under the agreement, Barnes & Noble will continue to operate the stores under the Tattered Cover moniker and will continue to employ “substantially all” of its current employees.
“In addition to the best purchase price, the Purchaser’s offer provided the best continuity of operations for our customers, staff, landlords, and community,” a Tattered Cover spokesperson said in an email. “Other bids did not contemplate the continuation of our operations at all existing locations.”
The U.S. Bankruptcy Court must sign off on Barnes & Noble’s proposed acquisition, which would need to happen no later than the end of July. A spokesperson for Tattered Cover said it is possible the company receives higher bids, although it is extremely unlikely.
The acquisition of Tattered Cover would restore Barnes & Noble’s presence in Denver. It previously had a store on 16th Street Mall that closed in 2015. Since then, Barnes & Noble hasn’t had a location in Denver proper — the closest is its Glendale location on Colorado Boulevard.
While Barnes & Noble’s sales initially declined during the heights of the COVID-19 pandemic, forcing some branches to close, the company emerged stronger, reporting positive growth in 2022. Recent reporting by The New York Times suggests Barnes & Noble has also improved its strained relationships with independent bookstores.
Part of the book giant’s turnaround is due the philosophy of James Daunt, the company’s CEO. After being appointed during a tumultuous era in Barnes & Noble history, he instructed branches across the nation to act more as independent shops, and shrunk the company’s central office to accommodate that. Branches are encouraged to tailor their stores to cater to local communities instead of having identical displays across the nation.
While Barnes & Noble has opened new locations recently, the acquisition of Tattered Cover appears to be its first foray into acquiring a bookstore with multiple locations. The company has not responded to Denverite’s request for comment on the acquisition.
How Tattered Cover got to this stage
Since opening in 1971, Tattered Cover has long prided itself on its independent spirit. Its second owner, Joyce Meskis, made a name for the store when she brought two lawsuits to the Colorado Supreme Court in 1984 and 2002. The first challenged a law that criminalized displaying sexually explicit material in shops, while the second challenged a policy that allowed the federal government to monitor which books shoppers bought.
Meskis sold the company to husband-wife duo Len Vlahos and Kristen Gilligan in 2017. The couple faced the challenge of keeping Tattered Cover open while online book sales were dominating.
In 2020, Vlahos and Gilligan faced a two-front battle brought on by COVID-19 and a poorly-received response to the George Floyd protests, both of which negatively impacted sales. A third-party audit found at the time that Tattered Cover marginalized employees and authors of color.
Shortly afterward, Vlahos and Gilligan sold the bookstore to its current owners, Bended Page LLC, a group of three investors that included Kwame Spearman, who became chief executive. The trio inherited a bookstore that was not profitable and owed debts to publishers.
Under Spearman’s leadership, the bookstore set out on a rapid growth plan. To Spearman, more stores meant more revenue.
The gamble didn’t end up paying off, and Spearman stepped down from the chief executive role in April 2023 to run for Denver School Board. In July 2023, the board hired bankruptcy attorney Brad Dempsey as its next leader. Just months later, it filed for bankruptcy.
Documents filed to the U.S. Bankruptcy Court said Tattered Cover owed its various creditors nearly $3.2 million in unsecured claims. Creditors included publishing giants like Penguin Random House and Harper Collins Publishers.
