Table 1 The expansion of Borders and Barnes & Noble, 1993–1994
* estimate.
Source: Logos (1996).
By 2006, Barnes & Noble was operating 723 bookstores across the United States, which included 695 superstores and 98 mall stores; its total sales were around $4.8 billion.7 The company had diversified into the video games and computer software retail business and was operating a large number of video game and entertainment software stores under various trade names including Babbage’s, Funco and Software Etc. It had also become involved in publishing, acquiring Sterling Publishing in 2003 – a non-fiction trade publisher with some 5,000 books in print – and publishing an extensive line of classics under the Barnes & Noble imprint. In 2009 Barnes & Noble entered the ebook market by launching its own ebook reader, the Nook, and selling ebooks from its own website.
The Borders Group, with total sales of around $4.1 billion in 2006, was the second largest book retail chain in the US at this time, operating around1,063 bookstores in the US, including 499 superstores under the Borders trade name and around 564 mall-based Waldenbooks stores. Borders had also expanded internationally, opening a number of Borders stores outside the US (mainly in the UK and the Pacific Rim) and acquiring Books Etc. in the UK in 1997. But in the early 2000s the Borders overseas operation began to run into difficulties. In 2007 the UK business – which by then comprised 42 superstores in the UK and Ireland and 28 branches of Books Etc. – was sold to a private equity group, Risk Capital Partners, for a modest initial sum of £10 million. It was bought out by the management in July 2009 and went into administration in November 2009. All 45 Borders stores in the UK were closed on 22 December 2009. Borders’ US business also went into decline; its last recorded profit was in 2006 and from then on its annual sales fell and its losses grew. In February 2011 Borders announced that it had filed for Chapter 11 bankruptcy protection and by September all remaining Borders stores had been closed down.
The bankruptcy of Borders marked the end of an era, in the sense that the long-running rivalry between Barnes & Noble and Borders, which saw the two book retail giants rolling out their superstores across America, was now over. But the profound changes currently taking place in the retail marketplace will pose major challenges for Barnes & Noble and the smaller retail chains that remain. Bricks-and-mortar bookstores have long faced serious competition from online retailers like Amazon and from mass merchandisers (more below); now they face the real threat that a growing proportion of book sales will be realized as ebooks that bypass the physical bookstores altogether. Total revenues from the Barnes & Noble bookstores have been declining since 2007. Barnes & Noble is a significant player in the ebook marketplace but well behind Amazon in terms of market share, and it’s not clear whether the growth of its ebook revenues will be sufficient to offset the decline of bookstore sales. While Barnes & Noble will pick up some of the sales that would previously have been credited to Borders, it is likely that the overall proportion of retail sales accounted for by the superstore and mall bookstore chains – which was probably about 45 per cent in 20068 – will decline significantly in the coming years.
There is no doubt that the rolling out of the nationwide book chains in the 1990s and the intense competition that developed between them greatly increased the availability of books to millions of ordinary Americans. People living in parts of the country that had, until then, been poorly served by bookstores suddenly found that there were now two or more large bookstores within driving distance, carrying a range of stock that had simply not been available before in a bricks-and-mortar store. But this dramatic transformation of the retail landscape had its costs and consequences too.
The most visible consequence – one that has been much commented upon and much lamented – was the precipitous decline of the independent booksellers. While this decline predates the rise of the superstores, it was undoubtedly hastened by it. In 1958, one-store independent booksellers were selling 72 per cent of trade books in the US; by 1980 this had fallen to less than 40 per cent of trade sales.9 As the chains opened new superstores in the metropolitan areas across America in the 1990s, more and more independents closed down, forced out of business by the two-pronged pressure of rising overheads (and especially the rising costs of real estate) and declining revenues. The American Booksellers Association, which represents many independent booksellers, lost more than half its members in the 1990s and early 2000s: its membership fell from 5,100 in 1991 to 1,900 in 2004. Whether ABA membership figures are an accurate reflection of the actual number of independent booksellers in the US is debatable,10 but no one disputes the fact that the number of independent booksellers has fallen significantly and that their market share has declined. In 1993, the chains accounted for around 23 per cent of retail sales in the US; by the end of the decade, this had risen to over 50 per cent. During the same period, the market share of independent booksellers fell from 24 per cent to around 16 per cent. This decline continued into the 2000s, so that by 2006 independent bookstores probably accounted for only about 13 per cent of retail sales in the US.11
There can be no doubt that the decline of the independents was partly the outcome of predatory expansionist activity by the chains – this was not the only factor, to be sure, but it would be ingenuous to suppose that it played no role. The chains explicitly targeted those metropolitan districts or zip codes where the demographics were favourable to the sale of books, and these tended to be the same districts where independent booksellers were already located. Once the superstore opened, with its extensive stock range and aggressive discounting, it was very difficult for the small independent down the street to compete. On the other hand, many of the independents that closed down were poorly run businesses that didn’t serve their customers well. Their stores were disorganized, their stock-holding erratic, their accounts non-existent and they did little to make book-buying a pleasurable and rewarding experience for the consumer. ‘Did the independents go out of business because Barnes & Noble and Borders expanded and were predatory? Absolutely,’ said one former employee of a chain who was responsible for identifying sites for new superstores in the early 1990s. ‘The other side of the story is that they went out of business because you can’t be an amateur in this business anymore. Because bookselling was a noble profession, there seemed to be a fence between us and the rest of the economy; suddenly people woke up to the fact that you have to know what you’re doing.’ The independents that survived tended to be those that were well run and that built strong links with their local communities by hosting events of various kinds; it also helped if they owned their own real estate, or if they were protected by zoning regulations that restricted the activities of the chains. By 2007 there were probably only 400 independent booksellers left that were of real importance for trade publishers in the US. But by this time the decline of the independents appeared to have levelled off, as those that remained had succeeded in finding a strategy that would enable them to survive in the face of intense competition from the chains and other outlets. And for certain kinds of books, their role was and remains greater than their number and size – judged purely in terms of their revenue and their share of retail sales – would suggest.
The long decade of struggle between the chains and the independents ended unquestionably in victory for the chains, but there were skirmishes along the way that resulted in important gains for independent