Waterstones boss weighs AI books and a possible stock listing

Waterstones could stock books created with artificial intelligence if customers request them and they are clearly labeled, the company’s chief executive has said. Yet James Daunt, a veteran of the bookselling world, cautions that he does not expect AI titles to become common on shelves soon.

“There’s a huge surge of AI-generated content, and most of it isn’t the kind of book we should be selling,” he told INLIBER's Big Boss Interview podcast. “But it would be up to the reader.”

An explosion in AI use has sparked intense debate in publishing, as writers warn about job security and income. Daunt noted that Waterstones uses AI for logistics but keeps AI-produced content out of its stores for now.

“As booksellers, we sell what publishers publish, but I would instinctively recoil from that kind of book,” he added. He is heading into his 36th Christmas in the trade and said empowering local store managers has helped Waterstones thrive.

“Head office is there to make life easier,” he said. “Make sure orders arrive on time, but don’t tell managers where to put them.”

Daunt also indicated openness to broader corporate moves, including the possibility of a stock market flotation for the chain tied to Barnes & Noble.

Disdain for AI in literature

A Cambridge University study last month found that more than half of published authors fear AI could replace them, and around two-thirds reported their work was used to train AI models without permission or payment. Some writers, however, are using AI for research or editing, and a few are publishing AI-assisted stories.

Daunt warned that it would be surprising if AI books were positioned at the center of Waterstones. He stressed that readers value a personal connection with real authors, and any AI work would be clearly labeled to avoid misrepresentation.

Daunt’s approach has long been to challenge industry norms. When he took charge of Waterstones in 2011, he stopped publishers from paying for prominent in-store displays, a move that cost about £27 million in revenue but eventually helped restore profitability in 2016. Today, staff choose recommendations and store managers curate displays.

Waterstones also sells writing instruments, lighting, games, and gift wrap. The strategy has helped the chain grow despite broader high-street struggles, opening around ten new stores annually. In 2024, Waterstones reported profits of £33 million on sales of £528 million. The group also includes Foyles and Blackwell’s, under Elliott Advisers, and Daunt now leads Barnes & Noble in the United States as chief executive.

Possible listing talks

The success of its U.S. partner has fed speculation that Waterstones and Barnes & Noble could float together on a stock market, either in New York or London. Daunt called it likely, though he noted London’s IPO climate has cooled. Barnes & Noble is substantially larger than Waterstones, complicating the picture.

Budget impact on retailers

In his view, the latest Budget included measures that help retailers, even if the government’s move to raise employer National Insurance and the minimum wage drew criticism. Notably, business rates will fall for smaller sites, while larger warehouses and commercial spaces face higher costs, an adjustment Daunt says could level the playing field between High Street shops and online rivals.

Waterstones remains heavily tied to physical stores and small offices, with around 70% of annual profit generated in the year’s final months as consumer demand rebounds after the pandemic.

Personally, Daunt remains an avid reader, though he admits a tempting flaw: as a professional reader, he often starts more books than he finishes, drawn by the thrill of a fresh first chapter.

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Expert comment: A publishing analyst says transparency around AI-generated works is crucial for reader trust, and bookstores should avoid deceiving customers about authorship. Clear labeling helps shoppers make informed choices while safeguarding livelihoods.

Key takeaway: AI-produced books could appear in stores only if clearly labeled and trusted by readers; human authors continue to matter most in the retail storytelling experience. BBC News