Borders' demise isn't all good news for smaller booksellers

Sacramento BeeJuly 31, 2011 

They've survived Amazon, e-books and big-box retailers — at least so far.

Now independent bookstores are trying to find their way in a post-Borders world.

"Every independent bookseller in the country is talking about it," said Bill Senecal, manager of Beers Books on S Street in Sacramento.

"The book industry is in a real state of flux," he said. "The remaining independent bookstores are mutedly cautious about what the future holds. Everybody's just waiting to see."

Some are hoping for a boost in business from former Borders customers. Many are trying to differentiate themselves from online competitors through customer service and community events. Others are attempting to compete with online and retail giants by offering e-books, quick delivery and gift cards.

Meanwhile they remain beset by the same factors that helped kill Borders: Amazon and the exponential growth in electronic book sales.

"If I were a new bookstore, I wouldn't get too smug about Borders closing because the market is going digital," Senecal said.

The Association of American Publishers reported that e-book sales rose by 147 percent in May and 158 percent in April.

Beers, which opened in 1936, made the switch from selling mostly new books to selling 90 percent used books and plans to stick with that strategy, the store manager said.

Mike Barnard, board president of the Northern California Independent Booksellers Association and owner of Rakestraw Books in Danville, agreed that Borders' liquidation isn't a cure-all for small bookstores.

"The stores that are still left are stressed," Barnard said. "The down economy affects everybody. It's an incredibly unlevel playing field with Amazon. And the digital shift is affecting stores."

But Barnard said he's been living in a post-Borders market for two months now and things are better. After a local Borders store closed in May, he said he's seen a sales boost of 5 percent to 10 percent.

"Business has improved over the last couple of months without question," he said. "If we can annualize that it would be great."

Rakestraw, a 3,000-square-foot store that opened in 1973, has continued to pay its creditors, its rent and its employees through the downturn, Barnard said. That, and perhaps a single-digit profit, is about the most a small independent store can hope for, he said.

Rakestraw has stayed afloat by hosting author visits, recommending new books and cultivating a close relationship with its customers, he said.

In the Sacramento area, the Avid Reader stores on Broadway and in Davis are the last independent general-interest bookshops selling new books in both cities, said co-owner Alzada Knickerbocker.

The Avid Reader stands to gain the most from Borders stores closing in Davis and Sacramento, she said.

Knickerbocker said the stores will reach out to Borders' customers with ads and a rewards program.

The Avid Reader stores will also emphasize their ability to search for books, order them and have them ready for pickup in a short time frame, she said.

Like other independents, the Avid Reader stores have partnered with Google to provide e-books that work on many platforms, including the iPad and Barnes & Noble's Nook reader, but not the Amazon Kindle.

"We're reminding people we're not just a store from the '70s or '80s but have access to all the technology," she said.

Another battle front, Knickerbocker and others said, is making sure that Amazon collects sales tax from its California customers – as required by a new state law. The online giant is challenging the act and pursuing a voter referendum.

Not collecting sales tax is "a grossly unfair advantage they have over us for no reason at all," she said.

Knickerbocker watched several competitors close their stores when Borders came to Davis in 1998.

It was part of massive contraction in the number of independent bookshops that began in the 1990s and continued into the last decade, said Len Vlahos, chief operating officer of the American Booksellers Association, based in Tarrytown, N.Y.

The association, which represents independent bookstores, saw its membership decrease from 4,000 in 1993 to about 1,400 in the late 1990s – a 65 percent decline, Vlahos said.

The number stabilized and crept back up in 2009 and 2010 to about 1,500 members, he said.

At the same time, mall bookstores and superstores – including some Borders — were closing and big-box retailers such as Costco and Walmart were devoting less space to books, he said.

After a period in which book superstores sprang up across the nation, shelf space started to get in sync with demand, he said.

"What you're seeing is a bit of right-sizing," Vlahos said.

Independent stores that survived the reign of Borders, Barnes & Noble and Amazon were those that were able to quickly adapt, he said.

"The members who survived the massive declines are smart, savvy business people and very nimble," he said.

Small bookstores that function as community gathering spots have done well, said Hut Landon, executive director of the Northern California Independent Booksellers Association.

The group has gone from 300 members to about 200 today, he said.

Now that Borders stores are closing, there may be opportunities for new bookstores to take their place – especially in towns where Borders drove the competition out of business, Landon said.

What should they look like?

"Stores under 5,000 square feet that are part of a neighborhood and main street," he said.

"The independent stores that have gone with that model," Landon said, "have found relative success or at least stability in this craziness."

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