The CEO of Tattered Cover is optimistic about the bookstore’s sales after bankruptcy

Tattered Cover, a pioneer among the nation’s independent bookstores and a part of the Denver community for more than half a century, could have new owners as early as this summer to guide the chain through bankruptcy reorganization, according to its CEO.

Brad Dempsey, who took over as CEO in July, filed an amended reorganization plan with the U.S. Bankruptcy Court in Denver on Friday. He said non-disclosure agreements have been signed with several interested parties and the company is vetting potential buyers.

“I’m confident that we have a really solid interest in this and it ranges from individuals to corporate entities that I think have the resources to do that,” Dempsey said.

But Dempsey and Bended Page, the group that bought the bookstore in 2020, are also looking for a buyer who will maintain the culture and focus.

“The Tattered Cover is an incredibly powerful brand across the country,” Dempsey said. “My goal is to develop a group of buyers committed to continuing the idea of ​​the Tattered Cover and the activities of the Tattered Cover as a going concern, with its activities, its employees and its legacy, in especially the legacy of the First Amendment.”

Tattered Cover’s fame as a staunch supporter of the First Amendment was forged 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, with its comfortable armchairs and cozy corners, became a meeting place, a center of community events and a crusader against censorship.

Meskis successfully challenged a 1984 law that criminalized the sale of sexually oriented material to minors, and prevailed over police demands into a suspected drug dealer’s history of book buying. She said the information was constitutionally protected.

Received Meskis a PEN American Center award in 1995 for defending freedom of speech and expression. She founded the Colorado Freedom of Expression Foundation, a nonprofit organization dedicated to educating the public about the First Amendment.

In 2015, Meskis announced plans to sell Tattered Cover bookstores. Book industry veterans Len Vlahos and his wife Kristen Gilligan joined the company’s management team and acquired a majority stake in the company in 2017. Meskis retired that year. She died in December 2022 at the age of 80.

Colorado-based investment group Bended Page bought Tattered Cover in 2020. The founders were Kwame Spearman and David Back. Spearman, the bookstore chain’s CEO, took a leave of absence to run for mayor of Denver and then stepped down ahead of an unsuccessful run for the Denver school board.

The Bend Page board hired Dempsey, a bankruptcy attorney, as outside counsel. He was appointed CEO after an interim period and has been a long-time fan of Tattered Cover.

“That’s where I bought my first book. It’s where I take friends on dates,” Dempsey said.

He admired Meskis’ career and her support for First Amendment rights, which he fought for in court. As Tattered Cover struggled financially, Dempsey helped negotiate rent deferrals for the company and was at the helm when it filed for bankruptcy in October.

Looking at how Tattered Cover hit a financial cliff, Dempsey cited the COVID-19 pandemic, which devastated many small businesses. Like other independent bookstores, Tattered Cover also faces cutthroat competition from online titans like Amazon.

Dempsey also believes the bookstores’ previous purchases were underfunded. To stem the losses, Tattered Cover closed three of its seven stores at the end of 2023 and cut about a quarter of the company’s jobs. It still employs almost 70 people.

The Denver stores on East Colfax Avenue and at Union Station in Lower Downtown and at the Aspen Grove Mall in Littleton remain open. Tattered Cover also has a children’s store in the Stanley Marketplace in Aurora.

Dempsey is full of praise for the employees at Tattered Cover, many of whom have been employed for several years.

“In a bankruptcy case, the board, senior officials and staff often flee. Everyone here stayed and appealed to me,” he said.

A $1.275 million loan from Read Colorado LLC allowed Tattered Cover to increase its inventory late last year and get more books on the shelves in time for the holidays, Dempsey said. Tattered Cover was on credit with most publishers.

A successful run over the holidays has boosted Dempsey’s optimism about Tattered Cover’s future. Sales rose slightly in December, leveled off in January and then rose 14% in February and 20% in March, he said.

Some of the bookseller’s events, including a lecture by historian and Pulitzer Prize-winning writer Doris Kearns Goodwin, have sold out. Dempsey expects a big crowd on Saturday, which is Independent Bookstore Day.

Tattered Cover has hired people to up its social media game and plans to modernize its online presence.

The amended reorganization plan submitted on Friday refers to ‘liquidation’. Dempsey said Bended Page, not Tattered Cover, will be liquidated after a sale. The company will submit another set of documents detailing proposed bidding procedures, he said.

“Right now our projection is that we would try to have final bids in by the end of May, and the auction in the first half of June,” Dempsey said.

The transaction could be completed in July.