Now, it's moved across the street to a space that's less than half the size.

And with the downsizing came a new look, and new books, chosen specifically for this store's customers.

It's all part of Barnes & Noble's strategy to tailor each of the company's more than 600 locations to local tastes.

Barnes & Noble is adopting the strategy of independent bookstores that it once put out of business.

Here's how the bookseller is implementing its new approach, and why it thinks this new strategy will sell more books.

This is The Economics of Barnes & Noble.

Barnes & Noble was first founded in 1873.

In 1971, Leonard Riggio acquired the company, which set off a period of growth.

The retailer went public in 1993, in an era when it was opening superstores across the country.

In the 1990s and 2000s, Barnes & Noble bookstores really looked like large supermarkets filled with books, usually anchoring strip centers in the suburbs or rural areas.

And whether in Phoenix or Maryland or Ohio, the stores had the same books with the same furniture and the same layout.

It either had one floor or it had two.

If it had two, it had enormous escalators going up with this huge sort of open space in the middle to an upper floor.

That model happened to be extremely scalable.

They were trying to fill their stores with books and infrastructure at the lowest cost possible.

So they wanted to order all the same types of bookshelves, the same type of furnishings and decorations and other accoutrements.

So the company grew, and fast.

Those huge stores carried more books at lower prices than independent bookstores.

We all remember the rom-com You Got Mail.

Joe Fox.

I'm in the book business.

I am in the book business.

So many closed when Barnes & Noble came to town.

They weren't able to compete with the title selection or prices that Barnes & Noble offered.

But big stores and large inventories weren't enough to save Barnes & Noble from a digital threat.

Amazon was able to offer, kind of like Barnes & Noble had in the past, a huge selection of titles at lower prices than Barnes & Noble could because it didn't have the cost of real estate and other costs that Barnes & Noble was shouldering.

And it sunk a lot of money trying to keep pace, particularly in Nook, its e-reader business.

Take your story wherever you want it to go.

But nothing helped stop the bleeding.

The company's revenue has declined since 2012.

Then in 2019, hedge fund Elliott Management Corporation acquired the chain and installed James Daunt, who led British retailer Waterstones and founded his own independent bookstore, Daunt Books, as CEO.

It felt entirely intuitive to me that you allow each bookstore to run as an independent bookstore.

They will create much more interesting, much more dynamic, much more engaging bookstores.

And that meant reminding people about the appeal of in-person versus online shopping.

What you're missing is the opportunity to kind of read the book flaps of all the other books that are there and maybe get recommendations from the local bookseller who's working there.

The company says it wanted to emphasize the experience of visiting a physical bookstore.

So its new strategy strips stores of the cookie-cutter look and feel that had helped the chain grow its revenue and store count.

Some locations have moved on from the big box model to smaller stores.

And in these smaller spaces, they are reconfiguring the stores so that they're more of a maze and less of a supermarket aisle.

Plus, the company says each individual store has more autonomy over what books to order and how to display them.

Here at the Pikesville, Maryland location, the store manager says that customers like romance, books from Black authors and lots of fiction.

So the large romance section is at the front of the store.

And there's a huge display right in the center celebrating Black History Month.

Store managers can also choose how to run promotions, like this buy one get one 50% off deal on specific fiction books chosen by the team here.

Brooklyn has a very different demographic, a very different set of customers, a very different set of book interests to, let's say, somebody in Alabama, in Georgia.

Who is the best person to judge what those particular communities want to buy?

It's the booksellers in those communities.

The company has also been listening to its store managers on wider trends.

Manga was a small part of our assortment.

We had maybe five, six bays of books on manga.

And yet when these booksellers were reorganizing their stores, they were coming back to us saying, we want to do 38.

You know, we want to do 42, which was just almost sort of incomprehensible, except that's what they said their customers would respond to.

Dart also used this localizing strategy to turn around British bookstore chain Waterstones, which reported a 42.91 million pound loss across 268 stores in 2012, compared to a 16.32 million pound profit across 278 stores six years later.

The two businesses are on paper identical.

It had had identical histories and had reached an identical point of failure.

That's why Barnes & Noble relinquished some control to individual stores.

But that comes with its own set of challenges for the company.

You could walk into a bookstore and find out that it's really not doing well.

The manager's choices aren't appealing to customers and books aren't selling.

Still, Barnes & Noble says the strategy is promising.

For the first time in more than a decade, the company is planning on opening more stores than it closes in 2023.

We've seen a balancing in which much higher percentage of our sales are coming from books and books are growing really very dramatically.

If you run better bookstores, you sell more books.