The Tattered Cover, a beloved Denver institution and nationally known independent bookstore, has accepted a sales offer from Barnes & Noble, a model for the fictionalized corporate bookstore chain that ran a small independent bookseller out of business in the movie “You’ve Got Mail.”
The 53-year-old Denver business, which filed for Chapter 11 bankruptcy in late 2023, agreed Monday to accept Barnes & Noble’s offer of up to $1.83 million in cash. The agreement is for Tattered Cover’s four stores and is supported by the bookstore’s parent company, Bended Page.
Under the agreement, the name of the Tattered Cover Book Store and the store’s program of events would continue, according to a motion filed in U.S. Bankruptcy Court for the District of Colorado. The buyer, TC Acquisition Co. LLC, an affiliate of Barnes & Noble Inc., anticipates offering jobs to “substantially all” of Tattered Cover’s roughly 70 employees.
The purchase will cover the $1.6 million in secured claims that Tattered Cover owes. Barnes & Noble will pay $50,000 for back rent and plans to extend the leases on the store’s sites.
The lease on the store’s main location at East Colfax Avenue in Denver will be extended through 2038 and the lease on the store in the Aspen Grove shopping center in Littleton would run through 2030, said Steven Silvers, a spokesman for Bended Page.
The sale will need the bankruptcy court’s approval. The closing is set to take place by July 31.
The offer by Barnes & Noble, the country’s largest retail bookseller with about 600 stores, was one of three submitted by the deadline. One bid came from two Bended Page board members and the other from a third party.
Tattered Cover’s owner said it canceled an auction scheduled June 11 after one bidder dropped out and the other indicated it didn’t want to participate in an auction. Kwame Spearman, a co-founder of Bended Page and the company’s former CEO, said he and a partner submitted an offer.
Silvers said the bid by Barnes & Noble was the only one that contemplated keeping all four stores open.
A total of nine parties showed interest in buying the company and signed nondisclosure agreements. While Tattered Cover’s owner didn’t use a marketing agent or broker, the company said the bankruptcy case and the opportunity to buy the store were widely known and publicized.
No current owners or shareholders will be involved with Tattered Cover after the sale, Silvers said.
Brad Dempsey, who succeeded Spearman as CEO, said he wanted to find a buyer who would maintain Tattered Cover’s culture and focus. He said in an interview in April that Tattered Cover “is an incredibly powerful brand across the country” and his goal was to find buyers committed to keeping the doors open.
Tattered Cover’s renown as a fierce proponent of First Amendment rights was built by Joyce Meskis, who bought the store in 1974 when it was a small shop in Denver’s Cherry Creek North neighborhood. Under her ownership, Tattered Cover became a gathering place and a center of community events while fighting censorship and for the rights of readers and writers. Celebrities, high-profile politicians and former presidents participated in events at the store.
“This creates the nation’s first true hybrid bookstore, a bold and sustainable response to a marketplace that is dramatically different from when Joyce Meskis operated Tattered Cover for so many decades,” Dempsey said in a statement.
Tattered Cover’s name and culture will live on and the business will continue to serve the Denver area’s communities and protect First Amendment rights, Dempsey added. “The mission and spirit of Tattered Cover remains strong, with new resources, technology and renewed energy.”
James Daunt, CEO of Barnes & Noble, was an independent bookseller in London before taking over as managing director of Waterstones, Britain’s largest bookstore chain in 2011. Daunt was named CEO of Barnes & Noble in 2019 by a hedge fund that bought both companies.
A 2023 story by The Guardian said that Daunt’s approach at Barnes & Noble has been the same as the one at Waterstones: to take the “corporate” out of a corporate bookstore chain, allowing stores to cater to their communities and offer something different from Amazon.
“Amazon doesn’t care about books … a book is just another thing in a warehouse,” Daunt told The Guardian. “Whereas bookstores are places of discovery. They’re just really nice spaces.”
The road to Tattered Cover’s sale to a corporate bookstore chain ran through two changes of ownership and a pandemic. The COVID-19 pandemic, which hit many small businesses hard, took its toll. Tattered Cover faced unrelenting competition from Amazon and other online marketplaces.
Dempsey also believes the previous purchases of the bookstores were under-financed. Tattered Cover closed three of its seven stores and eliminated roughly a quarter of the company’s jobs in late 2023 to reduce losses.
In 2015, Meskis announced plans to sell the Tattered Cover bookstores. Book-industry veterans Len Vlahos and his wife Kristen Gilligan acquired controlling interest in the business in 2017.
Bended Page, co-founded by Denver natives Spearman and David Back, bought the struggling company in 2020. A $1.275 million loan from Read Colorado LLC, which includes two of the company’s board members, allowed Tattered Cover to beef up its inventory.
“In 2020, we purchased Tattered Cover because it had been, and we wanted to keep it, a Denver treasure,” Spearman said. “Right now, and we’ve seen it for some time now, it just feels like it’s harder and harder for local businesses to operate and succeed and we wanted Tattered Cover to be an exception.”
The idea of Barnes & Noble running Tattered Cover is tough, Spearman said. However, he expressed optimism about the name continuing and the national chain doing everything it can to “preserve the memory of a great institution.”
When Bended Page took over Tattered Cover, it opened new stores, including one in Colorado Springs, a move that some employees said strained resources and the staff. Employees complained of being overworked and under-paid, and Spearman was criticized for the treatment of employees and management decisions.
“Running a business is extremely hard, and then you couple that with running an independent local business in a really tough industry,” said Spearman, who added that he put in about $200,000 of his own money to keep the bookstore operating.
Court filings list a claim of $242,467 by Spearman for money loaned to the business and reimbursements.
Tattered Cover’s 2022 financial results provided to The Denver Post by an investor who didn’t want to be named show that excluding federal COVID-19 stimulus funds, the bookstore’s net loss was $577,000. Revenues totaled $10.626 million and costs were $11.2 million.
Spearman took a leave of absence as CEO in 2023 to run for Denver mayor and then stepped down ahead of an unsuccessful run for the Denver school board.
Tattered Cover filed for reorganization less than a year after the death of Meskis in December 2022. The parent company put the bookstore up for sale in March.