In a move that signals a dramatic reversal of fortunes for physical retail, Elliott Investment Management is reportedly preparing a multibillion-dollar initial public offering (IPO) for its combined bookstore empire, comprising the UK’s Waterstones and the US’s Barnes & Noble. As of December 18, 2025, the New York-based hedge fund has begun sounding out investment advisers for a listing that could value the consolidated entity at several billion pounds, marking one of the most anticipated market debuts of 2026.
The potential listing is not just a victory for the "bricks-and-mortar" business model, but a high-stakes endorsement of the London Stock Exchange (LSE). After years of high-profile departures to New York, the decision by a major US hedge fund to favor a London listing for its crown jewel retail asset provides a much-needed boost to the City’s prestige. The move follows a stellar financial performance by both brands, which have defied the digital onslaught of Amazon.com Inc. (NASDAQ: AMZN) to post record profits fueled by a resurgence in physical reading habits and the viral "BookTok" phenomenon.
A Turnaround for the Ages: The Path to the Public Markets
The journey to this IPO began in 2018 when Elliott acquired Waterstones, followed by the $683 million purchase of a then-struggling Barnes & Noble in 2019. At the center of this transformation is James Daunt, the CEO of both chains, who applied a "boutique" philosophy to the scale of a multinational giant. By decentralizing control and allowing individual store managers to curate their own stock rather than relying on a rigid, centralized algorithm, Daunt effectively "un-chained the chain." This strategy turned bookstores into community hubs, a move that has paid off handsomely in the post-pandemic era.
As of late 2025, the combined group’s financials tell a story of remarkable growth. The business reportedly generated approximately $400 million (£299 million) in profit from roughly $3 billion in sales over the 2024/2025 period. Waterstones alone saw its pre-tax profits nearly quadruple to £42.9 million for the year ending April 2024, while Barnes & Noble underwent a massive physical expansion, opening 67 new stores in 2025 alone. This aggressive growth in store count—at a time when many retailers are shrinking their footprint—has positioned the company as a dominant force in the "experience-led" retail sector.
The timeline for the float is expected to accelerate in the coming months. With investment banks likely to be formally appointed in early 2026, analysts anticipate the IPO will occur in the second half of the year, following the conclusion of the companies' April financial year-end. The structure of the deal is expected to present the two brands as a single, global powerhouse in the book trade, offering investors a "pure-play" stock that currently has no direct equivalent on public markets.
Market Shifting: The Winners and Losers of a Bookshop Float
A successful IPO for Waterstones and Barnes & Noble would create immediate ripples across the retail and media sectors. One of the primary beneficiaries is expected to be the London Stock Exchange itself, which has been desperate for a high-profile "win" to prove its viability against the New York Stock Exchange (NYSE). For investors, the listing offers a new "blue-chip" retail option, with James Daunt explicitly comparing the company’s future profile to that of the successful UK retailer Next plc (LSE: NXT).
Conversely, the listing could pose a challenge to existing UK retail proxies like WH Smith PLC (LSE: SMWH). While WH Smith has pivoted toward travel retail in airports and train stations, its high-street division has struggled, reporting a 6% sales drop in early 2025. A public Waterstones would provide institutional investors with a more focused, high-growth alternative in the book and stationery space, potentially leading to a migration of capital away from legacy retailers that lack a clear "discovery" appeal. Similarly, smaller discount players like The Works (LSE: WRKS) may find themselves squeezed as a well-capitalized Waterstones uses its IPO proceeds to expand into smaller, curated boutique formats.
In the US, the impact will be felt by media and education giants like Scholastic Corp (NASDAQ: SCHL) and Pearson PLC (LSE: PSON). While these companies operate in different niches, they often compete for the same "media and literacy" allocations in institutional portfolios. A revitalized, public Barnes & Noble offers a direct consumer-facing play on the physical media comeback that may prove more attractive than traditional publishing models. Even Amazon (NASDAQ: AMZN) faces a strategic challenge; while the e-commerce giant remains dominant, the growth of Barnes & Noble’s physical footprint has successfully eroded Amazon’s "monopoly on discovery," proving that for many readers, the algorithm is no match for a physical bookshelf.
The London Choice: Regulatory Reform and the "US Exodus"
The decision to list in London rather than New York is perhaps the most significant aspect of Elliott’s strategy. Throughout 2024 and 2025, the UK market faced a "US exodus," with companies like Flutter Entertainment and Arm choosing US listings for better liquidity and higher valuations. However, the UK’s Financial Conduct Authority (FCA) responded with radical reforms that took full effect by late 2025. These include the merging of "Premium" and "Standard" listing segments and the allowance of dual-class share structures, which permit firms like Elliott to retain significant voting control for up to a decade post-IPO.
These reforms have made London a more agile and competitive venue. For a company like Waterstones, which has a history of rapid acquisitions—such as its recent purchases of Blackwell’s and Foyles—the new rules removing the requirement for shareholder votes on major M&A deals are a significant draw. Furthermore, the UK investor base is traditionally more receptive to "yield-over-growth" stocks. While New York investors often demand tech-like growth curves, London investors value steady cash flow and reliable dividends—a profile that fits the resurgent, but mature, book retail market perfectly.
This event also fits into a broader global trend of "physical media" resurgence. From vinyl records to film photography, younger generations (Gen Z and Alpha) are increasingly seeking tactile experiences to counteract digital fatigue. The "BookTok" trend on TikTok has transformed reading into a social, aesthetic pursuit, driving millions of young customers into physical stores. By listing now, Elliott is looking to capitalize on this cultural shift, framing the bookstore not as a dying relic of the 20th century, but as a vital, "un-algorithmable" component of the 21st-century social landscape.
What Comes Next: The Road to H2 2026
In the short term, all eyes will be on the selection of the underwriting syndicate. The appointment of major banks like Goldman Sachs or Morgan Stanley would signal the scale of Elliott’s ambitions. Investors should also watch for any further "tuck-in" acquisitions by Waterstones or Barnes & Noble before the float, as the company may seek to bolster its market share in the US or expand into European markets to present a more global growth story to prospective shareholders.
The long-term challenge for a public Waterstones/B&N entity will be maintaining the "James Daunt magic" under the scrutiny of quarterly earnings reports. The "un-chaining" strategy relies on a degree of inefficiency and local autonomy that can sometimes clash with the cost-cutting demands of public markets. Furthermore, as the company expands, it must navigate a potential cooling of the "BookTok" trend or a shift in consumer spending if the global economy faces a downturn in 2026. However, with a healthy $400 million profit cushion, the company enters the IPO process from a position of undeniable strength.
Final Assessment: A Landmark Moment for the City
The potential IPO of Waterstones and Barnes & Noble represents a landmark moment for the UK stock market and the retail industry at large. It validates the turnaround strategy of James Daunt and proves that even in an era dominated by digital giants, physical retail can thrive if it offers a curated, high-quality experience. For the London Stock Exchange, this listing could be the "proof of concept" needed for its 2025 regulatory reforms, potentially stemming the tide of companies moving to the US.
Investors should watch for the formal prospectus in mid-2026, paying close attention to the proposed dividend policy and the company's plans for further US store openings. If successful, this IPO will not only enrich Elliott Management but also provide a new template for how "legacy" retail brands can be reimagined and reborn for the public markets. In a world of digital noise, the humble bookshop is proving to be one of the most resilient and profitable investments of the decade.
This content is intended for informational purposes only and is not financial advice.
