Bookstores Rethink Retail Missions

Meryl Layton spends almost as much time going to toy fairs and gift shows as bookstore meetings, which may seem surprising, since Ms. Layton owns four bookstores in central New Jersey.

A few years ago, Layton owned six bookstores. Since then, several chain superstores, including giant Barnes & Noble, have entered her area, luring away customers, and forcing her to consolidate. Now Borders, another superstore, is establishing outlets near several of her stores, promising new competition.

While the economic impact of chains on independent bookstores has been amply documented in recent years, the cultural impact of the chains on the world of books has yet to be definitively quantified, according to experts such as Avin Mark Domnitz, president of the American Booksellers Association (ABA).

In financial terms, the struggle between independents and chains is a "battlefield," says Mr. Domnitz, who is also chairman of Harry W. Schwartz Book Shops, an independent chain of six stores in Milwaukee. Domnitz worries that the rise of the chains may be stifling diversity in book publishing, particularly for books on the fringes that may tackle unpopular issues.

Layton's challenge is being duplicated in scores of communities around the United States. Back in 1991, the independents accounted for 33 percent of market share, while the chains had only 22 percent.

In just the past two years, chains have substantially increased market share at the expense of independents. According to the 1994 Consumer Research Study of Book Purchasing, chains had a 23 percent share of the retail book market in 1993; and by 1994, that percentage had shot up to 27 percent.

Conversely, independents had 24 percent of the market in 1993, and only 19 percent in 1994.

Financially, Domnitz says, independent store owners need to "understand that they are operating in a retail environment. You've got to give the customer what he wants. If it's a cup of coffee, well, then you may have to provide it."

But what's worrisome, he says, is that bookstores have always had a dimension beyond just the commercial aspect of retailing; while booksellers were always in business to make money, they also cared deeply about books.

Domnitz wonders if that same love for books motivates the publicly held chains. He is not so sure that the huge superstores will continue to stay huge once they garner market-share clout. He worries that they will be tempted to reduce operating costs by trimming store sizes, and thus, reduce the number of books available.

Layton, who is based out of a small, attractive store in Cranford, N.J., says that the large chains have increasingly turned bookstores into "entertainment centers."

So "we've had to look for nonbook products, such as offering toys and gifts, items that can be more profitable than books." While Layton says she is grateful to be "holding her own," she worries about the rivalry between the chains and independents on the quality and quantity of books themselves.

Case in point: Given competitive pressures, she is not able to carry as many books by first-time authors, unknown authors, and 'mid-list' (less popular) fiction as before the arrival of the chains. Still, she says, she will track down any book that a customer requests, no matter how difficult it is to find.

Some independent booksellers have done quite well by offering unique products, such as New York Bound Bookshop, in Rockefeller Plaza, in Manhattan. The store, opened more than 20 years ago, is owned by Barbara Cohen and Judith Stonehill. They offer unique historical books, as well as mainstream titles.

Still, superstores are expected to continue to gain shares. In a new study, for example, financial analyst Amy Ryan of investment house Prudential Securities Inc. notes that Books-A-Million, which has a 1.5 percent share of the book market, will grow to about 2 percent of the market next year, as it opens some 20 to 25 new superstores. And other chains continue to add new and larger stores.

Ironically, while the chains build giant "superstores," they are closing low-performing mall units. According to Prudential, there are now about 1,600 mall outlets owned by the major chains, compared with over 2,300 mall outlets in 1991.

A publishing-research specialist, who requests anonymity, says that mass-market chains may be prodding publishing houses into printing fluff books, such as the many inspirational, and how-to books that consistently appear on bestseller lists.

Still, the chains, such as Barnes & Noble, Borders-Walden, Crown Books, and Books-A-Million, argue that they are bringing more books to the retail public than ever before, except perhaps at local libraries. "On average, our superstores carry 150,000 titles," says Lisa Herling, a vice president of Barnes & Noble. "And if we don't have the title you want, we'll order it for you," she says.

"We've tried to make our stores 'browser-friendly,'" Ms. Herling says. "Customers come into our stores and stay for up to two hours. We carry thousands of 'back-list titles' [hard to find books] that have not been carried by the independent stores because they don't have the shelf space. And we carry titles from over 10,000 different publishers."

Most of all, Herling says, "we are reintroducing people" to books. People who were "not buying books before, are now buying them in our stores. We're giving people a reason to come to bookstores and buy books."