Bookstores

A bookseller’s advice for Amazon CEO Jeff Bezos

15 August 2017

From a Los Angeles Times op-ed:

Amazon founder Jeff Bezos, one of the world’s richest people with a net worth north of $90 billion, recently asked his Twitter followers for suggestions regarding philanthropic giving. He wanted their ideas on how to help the world become a better place. “I’m thinking I want much of my philanthropic activity to be helping people in the here and now — short term — at the intersection of urgent need and lasting impact.”

As a bookseller, I’d like to offer a suggestion: Stop hawking books on Amazon at such drastically slashed prices.

Mr. Bezos, your strategy was brilliant. You offered up books at unbeatable prices and threw in free shipping as well. The public was hooked. You broadened your inventory and offered other items. With the convenience of shopping 24/7 from one’s own computer, you transformed retail. And it brought you immense wealth.

Years later, you continue to sell books at a heavy discount, often at half the list price. For us brick-and-mortar booksellers, this master business plan you devised has been devastating. Independent bookstores across the country were forced to close their doors. Where once neighborhood bookstores abounded there are now many communities that have none.

. . . .

There is no way we can come close to matching your undercut prices. If we were to sell books at the rates you do — at or below what we buy them for from publishers — we would have no money to pay our rent, our staff or our utilities. It just can’t be done. Believe me when I tell you, no one gets rich running a bookstore – the profit margin is modest at best. To just break even after expenses is to run a successful store.

We do it anyway because selling books is a calling. Booksellers are devoted to the written word. They find immense pleasure in finding just the right book for a customer in search of something to read. A good bookseller can do this even if the customer is looking for a genre that the bookseller is not well versed in. That’s the art of bookselling.

Books are not just a commodity, like a car battery or jacket or pair of boots. They tell our stories and are the basis of our culture. They let us travel to worlds we would never otherwise see. They open our eyes and make us better for the things they reveal. Books let us escape our problems or help us to solve them; they inspire us. They present new, different perspectives, make us think and invite dialogue.

Link to the rest at Los Angeles Times

PG absolutely agrees with the OP that books are tremendously beneficial to individual readers and to our collective culture.

That’s why Jeff Bezos has performed an incredible public service by pushing book prices down so more people can afford to purchase books and build their personal libraries rather than relying upon remote and underfunded libraries. Undoubtedly, our culture has been greatly enhanced by the dedication of Mr. Bezos to such an honorable pursuit.

High book prices are stealing knowledge from those who can least afford such losses and would most benefit from lower prices.

PG notes the author of the OP works for Vroman’s Bookstore, located in Pasadena, California. The median home value in Pasadena is $755,100. San Marino, California, a ten-minute drive from Vroman’s, has a median home value of $2,249,000.

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Ten kinds of Barnes & Noble® café customers: Read and laugh—or weep

10 August 2017

From TeleRead:

Maybe Barnes & Noble® can help me crack a mystery. Just who are its café customers? I’m a software developer by day and author-editor by night, and as an outsider, I’m baffled. Kids don’t hang out at malls anymore. Who buys CDs? Who reads all those magazines? Who buys paper greeting cards? Who shows up in person to buy hipster board games? Who goes to bookstores to buy tea kettles or beer steins?

I confess. I myself still visit the ghost-towny big-box store near me, usually with my kids, and sip a coffee-like drink at the B&N® café. But about the only people I see in the café fall into the following categories—none of them book-buyers:

Category #1: The Never-Buy / The Showroomer

Stacks of B&N® books on the table. No snacks or drinks from the cafe. Sitting there all day, reading and reading and reading, never purchasing a thing.

. . . .

Category #3: The WiFi

Surfing the Web, usually on a 15-pound Dell® laptop with stickers all over it. White earbuds. Hard Rock Café® t-shirt.

. . . .

Category #5: The Old Lady / The Old Guy

Brought library books and a bottle of orange juice from home. Flip phone. Lots of nose-blowing. Smiling at everyone. Shawl. Bifocals hanging around neck. Crumpled napkin with lipstick on it.

Link to the rest at TeleRead

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Department Stores Slow Declines in Sales

10 August 2017

From The Wall Street Journal:

Here’s the good news for department stores: business isn’t getting worse.

Macy’s Inc.  and Kohl’s Corp. reported second-quarter financial results Thursday that showed a slower decline in same-store sales from the beginning of the year, which followed a disappointing holiday season.

Macy’s same-store sales—a metric that tracks sales at established locations that haven’t recently opened or closed—fell 2.8%, better than the 5.2% retreat in the first quarter. Analysts on FactSet had predicted a 3.3% decline.

Kohl’s same-store sales retreated 0.4% in its latest quarter, less than the 2.7% decline in the first quarter and the 1.5% expected by analysts.

Still, foot traffic has steadily slowed at brick-and-mortar stores as shoppers increasingly turn to Amazon.com Inc. and e-commerce to spend their dollars. Both Macy’s and Kohl’s have seen same-store sales shrink for several quarters in a row.

. . . .

The shift to online shopping has pinched Macy’s and its peers, which have responded by closing weaker locations and investing in e-commerce. Both companies have also flirted with a greater focus on health and wellness.

But the moves haven’t been enough to counter weaker demand. Macy’s earlier this year said it would eliminate more than 10,000 jobs and plans to close a number of stores.

Department stores have also seen margins pressured by promotions, as they look to lure deal-seeking shoppers back. Dillard’s managed to tap the brakes on the fall in its same-stores sales, posting a 1% retreat in its second quarter, better than the 4% seen in the first three months of the year. But the company swung to a loss as it cut prices to help clear bloated inventory.

Link to the rest at The Wall Street Journal (Link may expire)

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Chapters Indigo Increases Sales by 6.8% in Q1 2017

10 August 2017

From GoodEReader:

Indigo Books and Music has reported that they have generated $206 million dollars for the first quarter of 2017, which is an increase of 6.8% over the same period last year. This is the 15th straight quarter that the bookseller has been profitable.

Total comparable sales, which includes both online sales and comparable store sales, increased by 5.0%. Revenue growth was strong in retail operations and continued to surpass expectations online. This performance was driven by continued double digit growth in the general merchandise business, with exceptional growth in the Lifestyle, Paper and Toy categories. The core trade book business remains healthy, showing growth over last year despite no blockbuster title launches this quarter.

. . . .

After the launch of its new Sherway Gardens store in Toronto last year, the Company continued to roll out its new store concept in Oshawa and Ancaster during this quarter. These newly renovated stores, which reflect Indigo’s transformation from a bookstore to a cultural department store for booklovers, are all a great success.

Link to the rest at GoodEReader

PG says a “cultural department store for booklovers” sounds like an interesting idea, although he will rely upon Canadian visitors to TPV to discuss what this means.

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West Grove Collective: Bookstores a place of ideas

7 August 2017

From The San Diego Union-Tribune:

While physical books may not continue to be the dominant form of media, it will be ever more important to encourage the habit of reading. We know that keeping up this soul-nurturing activity will be more of a challenge as time goes on. For those of my generation who read anywhere and everywhere as a child, even under the covers with a flashlight, if need be, there is no risk of losing the habit, because it is as natural and necessary as our morning tea.

We read to be entertained, to educate ourselves, to escape. Often, we read to find our own story — the thrill of finding characters we can relate to, learn from and live vicariously through. We read to answer unresolved questions and solve mysteries.

. . . .

While physical books may not continue to be the dominant form of media, it will be ever more important to encourage the habit of reading. We know that keeping up this soul-nurturing activity will be more of a challenge as time goes on. For those of my generation who read anywhere and everywhere as a child, even under the covers with a flashlight, if need be, there is no risk of losing the habit, because it is as natural and necessary as our morning tea.

We read to be entertained, to educate ourselves, to escape. Often, we read to find our own story — the thrill of finding characters we can relate to, learn from and live vicariously through. We read to answer unresolved questions and solve mysteries

Link to the rest at San Diego Union-Tribune

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Strategies to cut overheads in a shrinking book business

31 July 2017

From veteran publishing consultant, Mike Shatzkin:

An inexorable reality of today’s commercial book publishing world is that it is shrinking.Although there have been no obvious signs yet that actual long-form book reading itself has declined (even though that would seem a likely consequence over time of the changed ways we get our reading inputs), the self-publishing and indie segment of the market keeps growing at the expense of the legacy commercial business.

Although it would take data I don’t have to prove this, it certainly appears anecdotally that the big houses are cutting back their investment in midlist titles, perhaps actually cutting future title count (which, over the years, has been an often-espoused but seldom-pursued strategy) but also offering smaller advances for all but the very top books.

Sales seem to be drifting away from the established publishers as their title outputs shrink or remain static and are shifting to Amazon’s own titles and indies, which is where the title base is expanding.

When businesses are shrinking, or even just not growing, it is a normal reaction to find ways to cut costs to maintain margins and profits. And, in fact, the big publishers have generally been managing their costs pretty effectively during a period of flat or declining top line sales.

In that context, it was no real surprise when it was publicly announced last week that F+W Publishing, which recently changed ownership, will cut overheads by moving from doing their own sales and distribution to working instead through Perseus, an Ingram company.

Meanwhile, the whole legacy industry worries about the future for Barnes & Noble.

Last week a significant Barnes & Noble shareholder called publicly for the chain to offer itself for sale, apparently calculating that new (and perhaps “private”) ownership would see paths to profits that aren’t being followed right now. This follows continuing evidence that B&N’s overall sales track the legacy business, and are therefore declining. Amazon, of course, is not just the principal creator and beneficiary of the new competitors, primarily independent authors. They are also moving from being an online-only retailer to competing in B&N’s milieu: physical locations offering books.

. . . .

Amazon’s supply chain, built on a scale that the book business alone could never support, is now the gold standard. It will enable them to continue rolling out smaller stores, which is the kind of outlet that can succeed in today’s book marketplace. The stark fact today is that more than half the sales are online (and despite BN.com and the increased frequency of online book peddling from authors and various vertical organizations enabled by Ingram’s Aer.io and its competitors, almost all of those go to Amazon).

Big in-store inventories have become a pointless anachronism.

It is cheap sport to ridicule Barnes & Noble’s performance in the Internet age. They’ve made many of the standard incumbent mistakes in the face of upstart competition. They dealt themselves out of the online business by not pursuing either of the two most likely paths to success. They should either have made their dot com a stand-alone business, with pricing and growth aspirations beyond books that competed with Amazon, or they should have tightly integrated the online and store offerings to produce a hybrid that had its own appeal. They did neither.

. . . .

The shrinkage of the commercial business has other visible impacts. There is anecdotal evidence that the agents are suffering from these cutbacks. One much-younger-than-I-am publishing veteran recalled for me that when he started agenting (he no longer is active in that aspect of the business) a dozen years ago, he could live on his salary as a fledgling agent and he could really “build a list”. Neither of these things seem to be possible anymore, or at the least they are much more difficult. Meanwhile, even the older agents — those who have a list of productive authors — are finding it get harder and harder to make sales. And like publishers of a certain age, these agents don’t find their own progeny or their younger staff as willing to commit money or time to the future of the business as they would have expected them to 10 or 20 years ago.

Present trends clearly suggest that we will continue to have fewer commercial publishers signing up fewer books for smaller advances outside the handful of authors that are virtual guarantees to deliver big unit sales. And for those books that do have an assured big unit sale, publishers will tend to be willing to overpay because they need throughput to feed their fixed-overhead machines.

Link to the rest at The Shatzkin Files

PG has disagreed with more than one of Mike’s posts in the past. In this instance, PG doesn’t disagree with the way Mike has characterized the current business climate for publishers. Mike has described the serious (likely fatal) problems of the traditional book business utilizing perspectives and information sources only a long-time publishing professional would understand.

However, as far as a solution for Barnes & Noble’s or the publishing industry’s overall problems, PG is reminded of an old business adage, “You can’t cut your way to success.”

Unless there is a reason to believe that a smaller book business will, by virtue of its size, gain access to powerful strategies, tools and talents that the larger one can’t obtain, cutting expenses is just trying to keep the Titanic afloat by tossing buckets of water overboard.

For authors, PG will repeat his harangue that the “standard” publishing contract that will last for the term of the author’s copyright – the remainder of the author’s life plus 70 years in the US and similar lengths of time in other countries – puts traditionally-published authors into a very difficult situation. They’re the only ones who can’t jump ship and take their sources of income with them.

Traditionally-published authors have signed a contract that ties up their books basically forever. The contract is with a publisher that is a corporate entity, not a person.

Although the publisher’s past record of selling books or an editor’s reputation for quality work developing other authors’ careers may have been a key element in deciding to place the author’s book with that particular publisher, the editor and the people who worked hard to establish a successful sales record are not parties to the contract. They have no obligations to the author or to the publisher. The publisher probably has no long-term obligations to the people who built the publisher’s reputation.

Cutting your way to success often means firing people with the highest salaries. Cutting your way to success can also mean ruthlessly pruning expenses so the corporation can be sold to an entirely new owner.

The author has no voice in choosing a new owner for the publisher and no ability to change the lifetime term of the publishing contract.

The new owner will undoubtedly be another corporation. That corporation may be operated by people who are experienced and skilled in the book business or the new owner may be a hedge fund that specializes in sucking the last dollar from distressed properties prior to placing them into bankruptcy where even lower bottom-feeders will pick over the bones of the once-successful publisher.

And the author continues to be an unwilling participant in the process by virtue of the lifetime plus 70 contract she signed.

Visitors to TPV can decide whether publishers operated by bottom-feeders will be conscientious about sending out timely and accurate royalty reports. And royalty checks.

If an author has an obligation to give the publisher first option on new books or is prohibited from writing books that will compete with those the publisher has already published, how likely is it that the bottom-feeder will promptly respond to the option manuscripts or agree that the new books are not competitive so the author can sell those books to another publisher or self-publish them? A bottom feeder might decide that the author should pay a fee to obtain clearance to take each new book elsewhere.

PG reflexively takes the author’s side in business transactions with others. As he has mentioned before, Mrs. PG is a long-time author, first traditionally published and, in recent years, very happily self-published.

He lays out these possibilities and probabilities not to ruin the day for a traditionally-published author, but as a warning to act like a business person who sees a big storm on the horizon and take whatever precautions are available to minimize the financial and emotional damage which is likely to occur based upon current trends in the book business.

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His Life Among Books

31 July 2017

From The American Booksellers Association, interviewing Bradley Graham, co-owner of Politics and Prose in Washington, D.C.:

Bookselling This Week: Please talk about your early experiences with reading and books.

Bradley Graham: Books helped propel me into my first career — journalism. I came of age reading the works of Tom Wolfe, Truman Capote, Norman Mailer, George Plimpton, Gay Talese, and Hunter Thompson. They were the purveyors of the “New Journalism,” eschewing the standard model of dispassionate, even-handed coverage and instead incorporating literary devices more common to fictional works. Their creative narrative methods broke all the rules — and drew me in. I became a reporter and stayed in journalism for more than 30 years. Somehow, it seems fitting that after leaving journalism, I entered the book business and can now help others find works that might inspire them.

BTW: Did you hold other positions in the book industry before becoming a bookseller?

BG: No, I was a neophyte to the business, at least to the retail end. I had written two books but had never worked in a bookstore. Still, as a veteran journalist trained in the art of quick study, I figured, “How hard could running a bookstore be?” After six years at Politics and Prose, I now can attest, “Harder than it looks!”

BTW: How did you begin as a bookseller, and how long after starting in bookselling did you begin to feel that you had found a special vocation?

BG: I got into bookselling as a co-owner of P&P, joining with my wife, Lissa Muscatine, to buy the store in 2011. From the start, I recognized that a bookstore serves a larger purpose than simply selling books. What lifts it above ordinary retail is its role as a community center, a forum for discussion, and a cathedral of ideas. Keeping a bookstore going carries a deep sense of responsibility, but, as I quickly came to appreciate, it also can be especially gratifying as a form of service to community.

. . . .

BTW: What do you think are some of the most important changes in bookselling since you bought your store?

BG: The six years that I’ve been in bookselling have seen a dramatic shift in mood and outlook among indies. Back in 2011, much doom and gloom hung over the business amid widespread predictions that e-books would soon supplant physical books. Nowadays, the news media are filled with stories about an indie revival, and while some of this also is overdone, there is certainly justifiable renewed confidence in the survival of bricks-and-mortar bookstores. Why the shift? A combination of factors account for it, but perhaps most significant has been a deepened commitment by customers to shop local and support their neighborhood bookstores.

BTW: As an ABA Board member, what are your key goals for fostering the book industry, and bookselling in particular?

BG: First, to do more to help indies widen exceedingly narrow profit margins, whether by improving terms through ongoing discussions with individual publishers, developing new sources of financing, exploring cost-cutting options, sharing best practices among stores, or other measures. Second, further improve IndieCommerce and better educate stores about how to use online services.

Link to the rest at The American Booksellers Association

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Bringing A Bookstore To The Bronx

31 July 2017

From National Public Radio:

DON GONYEA, HOST:

Nearly a million and a half people live in the Bronx. And since the end of last year, there hasn’t been a single general interest bookstore in the New York City borough to serve them. But a Bronx entrepreneur is working on changing that. From New York, Rick Karr reports.

RICK KARR, BYLINE: Bronx native Noelle Santos decided it was time to open a bookstore in the borough even before Barnes & Noble closed its only retail location there.

NOELLE SANTOS: That Barnes & Noble – while I appreciated their presence, it never, like, really served the core or was accessible to the core of the Bronx. It could take you up to 50 minutes if you live where I live just to get there by public transportation. It was easier just to take an express train to the city. And then you’re taking your dollars out of the Bronx.

KARR: It’s not just money that’s flowing out of the borough, Santos says. Bronx-based writers have to head to Manhattan for readings and other promotional events. Bronx-based readers don’t have a place to connect. And online booksellers, she says, don’t solve either problem.

SANTOS: We need a physical space like a bookstore, whether it be independent or a chain store. It serves this physiological purpose that Amazon cannot reproduce. Amazon is not a bookstore. They are an algorithm, and that’s all.

KARR: It’s also easier for young people to get in the habit of reading if they grow up with access to bookstores, according to Lisa Lucas.

LISA LUCAS: That’s a place of discovery. That’s a place where the magic of books comes alive in a really tangible way.

KARR: Lucas is executive director of the National Book Foundation.

LUCAS: And I think the more places and spaces that we have that communicate the value of the book, the more that people will want to take a book home or think, oh, this is something I should do.

KARR: Creating a space like that isn’t easy. And Noelle Santos knows it, not least because she has no experience as a retailer. She works in a corporate HR department. Her only experience with booksellers is as a customer.

SANTOS: The industry has been pretty volatile over my entire lifetime, 30 years. And I was, like, OK. What can I do to put a spin on this traditional bookstore model to be a more sustainable business?

KARR: Santos decided that what she could do was combine a bookstore with another business she figures is pretty much recession-proof, a wine bar. She calls it The Lit Bar.

Link to the rest at National Public Radio

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Barnes & Noble Shares Jump As Activist Shareholder Calls For Sale

26 July 2017

From Deadline Hollywood:

Barnes & Noble shares leaped about 12% this morning after hedge fund Sandell Asset Management Corp urged the book retailer to sell itself following “strategic missteps and many troubling related-party transactions.”

. . . .

B&N shares lost nearly 40% of their value over the last 12 months as the retail chain struggled to compete with Amazon. It currently has a market value of about $565 million.

In a letter to the B&N board, Sandell Assett Management CEO Thomas Sandell calls the steep decline “shocking” since “physical books, and physical bookstores, are not going away anytime soon” — and the chain’s expected future sales justify a higher stock price.

Although founder and Chairman Leonard Riggio created “an iconic company,”  Sandell believes it blundered by splitting off its college book business and investing heavily in its “failing and poorly-conceived” Nook digital reading platform.

Link to the rest at Deadline Hollywood

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Barnes & Noble investor Sandell presses for bookseller’s sale

25 July 2017

From Fox Business:

An activist investor wants Barnes & Noble Inc. to try again to sell itself, arguing the bookseller needs an owner who can invest in its beleaguered operations.

Sandell Asset Management  has recently started buying a stake in the New York bookstore chain and is already among its 10 biggest investors, according to people familiar with the matter.

. . . .

Even though physical bookstores have declined in popularity in the U.S. in the internet age, Sandell reckons they aren’t going away and that Barnes & Noble’s status as the only national chain could attract a well-heeled private-equity firm or another retailer.

. . . .

The company has explored several possible deals to sell or break itself up over the years, including a buyout attempt by its chairman, Leonard Riggio. But none of the plans came to fruition and the stock has slumped 60% in the past two years, with the company’s market value plunging to just above $500 million.

Like many retailers, Barnes & Noble has struggled to compete with Amazon.com, which dominates the online sale of physical and digital books. For the fiscal year ended in April, Barnes & Noble’s revenue declined 6.5% to $3.9 billion, while earnings rose to $22 million. The bookseller, which currently has more than 600 stores, said it expects sales at stores open at least a year to show a percentage drop in the low single digits in fiscal 2018.

Link to the rest at Fox Business and thanks to Nate at The Digital Reader for the tip.

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