Court approves Denver’s Tattered Cover sale to Barnes & Noble, sealing $1.8M deal

Tattered Cover, Denver’s storied independent bookstore for half a century, is set to be owned by the largest corporate bookstore chain in the U.S.

A federal judge on Tuesday approved the sale of Tattered Cover to Barnes & Noble for more than $1.8 million in cash to pay off the store’s debts, kickstarting the process of closing the sale.

The deal marked Barnes & Noble’s first indie bookstore acquisition in the U.S. and the end of Tattered Cover’s history as an independently-owned store.

Barnes & Noble CEO James Daunt has committed to preserving Tattered Cover's indie spirit.

Under the deal’s terms, Tattered Cover will keep its name and all four current locations open. Barnes & Noble anticipates keeping all current workers employed.

Now, the Denver bookstore looks to start fresh from its bankruptcy chapter with the financial backing of Barnes & Noble.

“We just have to rebuild Tattered Cover to be a great bookstore,” Daunt told The Denver Gazette.

Barnes & Noble's CEO said the company plans to take a hands-off approach and leave it up to local store managers to remake Tattered Cover.

“They will be doing it, not us,” Daunt said.

The end for struggles?

The Denver bookstore, founded in 1971, went into bankruptcy last year after dealing with years of many changes.

A team of local investors bought Tattered Cover in 2020 under the name Bended Page LLC and expanded quickly with new locations. Then former CEO Kwame Spearman shifted from running the bookstore to running for political office, leading to his exit from Tattered Cover.

The bookstore amassed debt, according to court documents, struggling to adapt to the COVID-19 pandemic and online competition.

When Tattered Cover filed for bankruptcy, it closed all the new stores it opened under Bended Page and the owners looked to restructure.

Bankruptcy attorney Brad Dempsey took over the company as CEO to help sort out its dire financial problems.

In the midst of the bankruptcy process, according to court documents, the owners began to consider selling.

Three interested buyers submitted bids for an auction, according to court filings, but one dropped out and another didn’t want to participate leading to a canceled auction.

Bended Page then entered private discussions with Barnes & Noble and approved the deal.

The national bookseller was the only offer planning to keep all of Tattered Cover’s stores open, a Tattered Cover spokesperson said when the planned sale was publicly disclosed June 17.

First, it had to be approved by the bankruptcy court — which gave the green light Tuesday.

The only objection to the sale before the court's approval was from the landlord of the Littleton location at Aspen Grove over $40,000 in overdue rent and wanting more guarantee of the store's future success.

Court documents show the landlord rescinded the objection after working on a stipulation with Bended Page to secure its claim and speaking with Barnes & Noble about how it plans to support Tattered Cover. The court approved Aspen Grove's stipulation in the deal.

What’s next?

Tattered Cover is bracing for the holiday shopping season coming soon, when it hits peak volume of sales.

Daunt said one of the company’s first goals is helping Tattered Cover restock with more books and modernizing its computer systems.

“With better IT systems and as many books as they want, then it's going to be down to the skill of the individual booksellers and the teams there,” Daunt said.

Daunt was named CEO of Barnes & Noble in 2019 and has reorganized the national chain to operate like indie bookstores and curate books to local tastes. Now, the bookstore is undergoing its largest expansion in over a decade.

Barnes & Noble store managers are in charge of their own stores, but do follow general principles from the company, Daunt said. He said the chain hasn’t decided yet how it will structure Tattered Cover, or whether it will hire someone to lead the four stores in Littleton, Union Station, Aurora and on Colfax Avenue.

But for the most part, he said, Tattered Cover will be in charge of defining itself.

"They got a lot of work to do,” Daunt said. "They'll be property capitalized now, so they can get to work.”