Blackwell’s is back in the black. After 10 years of losing money, the chain of academic bookshops turned a profit last year and hopes to realise a long-held ambition to become a John Lewis-style staff-owned business.

Every one of Blackwell’s 550 permanent employees, from chief executive to junior bookseller will be handed a share of the business.

“Everyone will own it. It will be a very democratic organisation,” says chief executive David Prescott, sitting in his sparsely furnished office above the main Oxford store. “We will all have a share, none of us will individually own shares. It will be an equal stake whether you are the guy in ‘goods in’ [unloading deliveries], or a bookseller or the CEO. We will share it equally.”

Some of the 200 staff in Blackwell’s campus shops, which open only during term time, may also be eligible.

The owner, Toby Blackwell, whose great-grandfather founded the bookshop in 1879, has long wanted to hand it over to staff, hoping to secure its future and keep the family name above the door. Recession and enormous changes in the book world intervened. For years, the plan was left on the shelf, but now it is being dusted off.

Prescott says the business will soon be in a position to “stand on [its] own two feet”.

Although Blackwell’s has not set a date to institute the change of ownership, legal documents are being drafted and a constitution of values has been drawn up.

“We wouldn’t be setting up the [legal] vehicles now if it wasn’t going to happen in the next two to three years,” Prescott says.

The inspiration has always been the John Lewis partnership, which controls the department store chain and Waitrose supermarkets. “We have seen from John Lewis that when you own it, you care for it more and that brings commercial success as well.”

Prescott used to be “the guy in goods in”. He began his bookselling career in 1995, unloading books and logging them on the catalogue system. After working his way through the ranks, he took charge of Blackwell’s retail business in 2011 and became chief executive in 2013.

One of his first tasks was to announce the closure of Blackwell’s loss making library services division with the loss of 51 jobs. This is one factor behind the chain’s recovery, which he stresses is incomplete. “We are not at the point yet when we can say we are over the line.”

He is not expecting Blackwell’s to make a profit this year, as all proceeds are being ploughed back into the business to upgrade stores and develop a hi-tech till system.

Times are still tough. Waterstones, Britain’s largest bookshop chain, this week reported a 6% fall in sales. Blackwell’s declared victory in its latest accounts, simply because sales were flat against a backdrop of decline for the industry.

But Prescott thinks the outlook for high street booksellers is improving, after painful years when hundreds of shops were shuttered in a sharp economic downturn as they faced fierce competition from ebooks.

Borders, the US chain that also ran Books Etc, collapsed into administration in 2009. From 2005 to 2014, 500 independent booksellers closed.

Prescott, who is also vice-president of the Booksellers Association, thinks the book world is settling down after a “significant shift” from print to digital. “There is no reason why the industry shouldn’t start to grow again in terms of bookshops being successful.”

But remaining booksellers cannot stand aloof behind their counters. Increasingly bookshops are more than “a space to buy books”, but are also a social space for the community, he says.

Many bookshops took up this role years ago – photographs line the Blackwell’s stairs of Michael Palin and Roy Jenkins at book signings in the early 1990s, a reminder that the author event is hardly new.

But bookshops have never seemed so social. Blackwell’s turned the philosophy department of its Oxford store into a theatre for eight weeks in recent summers, staging Hamlet and Doctor Faustus. Its events programme is becoming more eclectic: John Lydon, Boris Johnson and Vivienne Westwood have appeared, while many shops run quizzes and book clubs to keep in touch with regular readers.

Amid this buzz of activity, Prescott sounds relaxed about the storybook villain of the publishing world: Amazon. “They are brilliant at what they do. They are a logistics business; they get things from A to B and that is great,” he says. “We have 500 booksellers and we can make personal recommendations.”

He also points out that Blackwell’s started selling books online in 1995, the same year that Amazon arrived on the web.

With Faustus and a Sex Pistols alumnus in the wings, it is easy to overlook Blackwell’s bread and butter business: selling textbooks to students and universities, as well as supplying specialist titles to business and public sector bodies, such as the Ministry of Defence and NHS.

Academic publishers have been the most reluctant converts to the world of e-readers, but Blackwell’s is determined not to be left behind. At the start of this academic year, it launched Blackwell Learning, a platform for students to purchase, read and annotate textbooks on phones, tablets and computers. Sales figures have not been released, though Prescott says he is confident of significant uptake.

His one criticism of publishers is that “they have tried to keep the book stitched together” and haven’t responded to customers who are accustomed to downloading music and TV in bite-sized pieces. He would like to see publishers allowing students to download individual chapters. “In the same way you don’t need to buy the album, you can buy one track on iTunes. I would imagine that is going to be something that customers will increasingly demand.”

While digital disruption is getting under way in academic publishing, in fiction and general bookselling, the storm may be passing. At Blackwell’s, tablet computer sales have overtaken e-readers. Meanwhile, the spectacular growth rates for ebooks are beginning to ebb. In the first 10 months of 2014, sale of ebooks rose by 8%, compared with growth rates of 19% and 66% in previous years, according to the Publishers Association.

Like most bookselling executives, Prescott has an e-reader, but mostly reads print, picking titles that range “completely across the spectrum”. As a member of his village book club, he has recently read Paul Kingsnorth’s Booker long-listed The Wake – “a fabulous book” – and an account of the decline of Detroit. But he says he gets plenty of recommendations from “Ray on the front counter”.

Ultimately, the future of his business is going to turn on whether events with big names, customer service, unexpected discoveries and cups of tea prove to be a tempting enough combination to attract the general public to buy in bookshops.

Can Ray’s recommendations win out against Amazon’s algorithms? At least the book world is at last sounding more optimistic.