Barnes & Noble as “the last bookstore chain standing”

Here is a look at the dwindling fortunes of Barnes & Noble:

In an interview with the Wall Street Journal, Mitchell Klipper, chief executive of Barnes & Noble’s retail group, said that, over the next decade, the chain will reduce its outlets by about twenty a year to reach a figure of about 450-to-500 consumer stores, down from a peak of 726 in 2008. A separate chain of 674 college bookstores (which thrive on tchotchkes and their exclusive franchises) is not part of that calculation. Even with so many fewer consumer stores, Klipper said, “It’s a good business model. You have to adjust your overhead and get smart with smart systems. Is it what it used to be when you were opening 80 stores a year and dropping stores everywhere? Probably not. It’s different. But every business evolves.” Klipper disputes the notion that bookstores will be unable to hold their own in the digital era, despite the chain’s need to downsize where rents or locations are hurting the prospect of acceptable profitability. Only a handful of the stores–fewer than twenty–are actually losing money, he told the Wall Street Journal’s Jeffrey Trachtenberg. But the company’s revenues have been significantly impacted by its commitment to build the Nook franchise.

While holding on to ownership of nearly 80 percent of its Nook division, a $300 million investment in Nook from Microsoft last fall, followed by an $89.5 million commitment from Pearson, which sees value in the growing electronic textbook market, are signs that Barnes & Noble can forge a way to secure enough of the digital business to offset the problems it faces in traditional bookselling.

But the overall impression of Barnes & Noble’s situation in the book industry is not nearly as positive as its owners and investors would like to portray. Publisher’s Weekly reported last week that Barnes & Noble is in the midst of contentious negotiations over terms with Simon & Schuster. “Although the exact nature of the disagreement is not yet clear,” Publisher’s Weekly reported, “Barnes &Noble has significantly reduced its orders from S&S. The main reason for the cutback seems to be, according to sources, Barnes & Noble’s lack of support from S&S.” (One way or another, this means a dispute over the size of discounts and advertising.) Another factor for concern is the impending merger of Random House and Penguin, which is expected to give this corporate behemoth the ability to deal with Google’s Android ecosystem, and Apple’s consumer cachet as well as Amazon’s dominant position in online retailing. There was an initial belief that Borders’ bankruptcy would bring a substantial portion of its in-store business to Barnes & Noble, but that has not turned out to be the case.

“Barnes & Noble is the last bookstore chain standing,” Wharton management professor Steve Kobrin, who is also the publisher of Wharton Digital Press, told the Knowledge@Wharton newsletter. “There’s still a niche there, but it may go to small independent bookstores.”

As I’ve watched these stories over the last few years, here are a few thoughts:

1. There still is a lot of irony in people lamenting the loss of Barnes & Noble today when not too long ago they were lamenting the rise of big box bookstores in general.

2. We could have a larger conversation about reading in society in general. Is this just about Amazon and online retailers taking away business or are less Americans reading in general? (Book sales were down 2.5% in 2011.) This extends to libraries as well: do people go there for books or DVDs?

3. There is room for interesting conversations about the goals bookstores meet in society or the function they play. Are they supposed to be more like “third places,” commercial learning centers where the average citizen can encounter a world of knowledge (commercial versions of a library), or retailers looking to make money? If bookstores are lost, what is really lost? If people aren’t going to bookstores, what are they doing instead?

No golden age of books: “five hundred or so legitimate bookstores” in the US in the 1930s

As people lament the closure of chain bookstores like Borders as well as independent bookstores, having fewer bookstores may not be sending us to some dark age. Indeed, easily accessible and abundant bookstores may be a relatively recent feature of society: there were few bookstores in the US in the 1930s.

I haven’t gotten far enough along in the book [Two-Bit Culture by Kenneth C. Davis] to tell you how Davis argues the story, but early in the book, I was absolutely dumbfounded by his description of the publishing business in 1931. He draws on a “landmark survey of publishing practices” carried out by one Orin H. Cheney, a banker, as a service to the National Association of Book Publishers…

“In the entire country, there were only some four thousand places where a book could be purchased, and most of these were gift shops and stationary stores that carried only a few popular novels,” Davis writes. “In reality, there were but five hundred or so legitimate bookstores that warranted regular visits from publishers’ salesmen (and in 1931 they were all men). Of these five hundred, most were refined, old-fashioned ‘carriage trade’ stores catering to an elite clientele in the nation’s twelve largest cities.”

Furthermore, two-thirds of American counties — 66 percent! — had exactly 0 bookstores. It was a relatively tiny business centered in the urban areas of the country. Did some great books come out back then? Of course! But they were aimed only at the tiny percentage of the country that was visible to publishers of the time: sophisticated urban elites. It wasn’t that people couldn’t read; by 1940, UNESCO estimated that 95 percent of adults in America were literate. No, it’s just that the vast majority of adults were not considered to be part of the cultural enterprise of book publishing. People read stuff (the paper, the Bible, comic books), just not what the publishers were putting out.

This data suggests that there is a big difference between books being published (and there is a reason the printing press is regarded as a major invention in human history) and how books can be purchased by consumers. There were not a lot of bookstores where people could browse thousands of volumes, let alone go online at Amazon.com and find tens of thousands of books.

If there was a paucity of bookstores in the 1930s, might the profile of libraries have been higher then? Libraries would have been one of the few places where average citizens could have found a wider range of books. Indeed, just before this period was when the Carnegie libraries were built:

A Carnegie library is a library built with money donated by Scottish-American businessman and philanthropist Andrew Carnegie. 2,509 Carnegie libraries were built between 1883 and 1929, including some belonging to public and university library systems. 1,689 were built in the United States, 660 in Britain and Ireland, 125 in Canada, and others in Australia, New Zealand, Serbia, the Caribbean, and Fiji.

That is a lot of libraries when there were only 500 or so bookstores in the entire United States.

Three and a half shelves of sociology books at Barnes & Noble

While browsing at a local Barnes & Noble store, I again noted something of interest: they have three and a half shelves of sociology books.

This is fairly common as sociology is lumped in with sections like Cultural Studies and Criminology. Just across the aisle to the left was fifteen shelves of Current Affairs and just behind this was at least 15 shelves of History.

I’m not surprised by this: sociology in the public’s eye has a low profile. If you look closely at the books in the sociology section, you can find a number on sociological topics that are not written by sociologists such as Nickel and Dimed, There Are No Children Here, The Social Animal, Triumph of the City, and The Better Angels of Our Nature. So there is really less than three shelves of books by sociologists. This is the case even with several books on the shelf that have received recent attention such as Going Solo and The Cosmopolitan Canopy. Along with anthropology, I can’t think of any of the big academic disciplines from which you could find fewer books at your average chain bookstore.

Is this simply indicative of the small number of people who go into a Barnes & Noble and purchase sociology titles or does it illustrate the broader profile of sociology in American life?

Thief caught stealing used sociology textbook at IPFW

Here is a story you don’t see everyday: a thief was caught stealing a used sociology textbook from the Indiana University-Purdue University Fort Wayne bookstore.

A Fort Wayne man is facing a charge of felony theft for allegedly stealing a used sociology textbook.

Surveillance video at Follett’s bookstore at IPFW showed Neil W. White leaving the store without paying for the book, “Sociology in Our Times: The Essentials,” which cost $139.50, according to court papers.

White, 29, told an IPFW police detective that he stole the book, and he also admitted taking textbooks from the store 10 to 12 other times, court papers stated.

A few thoughts:

1. This guy needed a sociology textbook so bad that he stole it?

2. The bookstore was asking nearly $140 for a used copy of a intro to sociology textbook? It looks like you can buy this new at Amazon for $110 and used for around $70.

3. Have sociologists really ever gotten behind a cheaper textbooks movement or even gone so far to use the “steal this book” marketing campaign? If not, you would think sociologists might support this given their ideological commitments.

Leaving bookstores alone in the London riots

Some people have noticed that the rioters/looters in London have ignored the bookstores:

While the rioters in England this week have looted shops selling shoes, clothes, computers, and plasma televisions, they’ve curiously bypassed one particular piece of merchandise: books. The Economist observes that while rioters have a centuries-old history of book burning, “books are losing out to high-end jeans and Apple-made gadgets” in London, with the Waterstone’s bookstore chain emerging unscathed and the WH Smith chain reporting only one incident (some stores closed as a precaution). In explaining that the store would probably stay open during the unrest, one Waterstone’s employee even felt comfortable enough to issue a dare to the rioters: “If they steal some books, they might actually learn something.” The exception to the rule is the gay bookstore Gay’s the Word, which had its front window smashed and its shopfront splattered with eggs (notably, no goods were stolen). “Our impression is that there are certain people who have an issue with a visible gay business and are using the excuse of chaos to cause anti-gay damage,” an assistant manager told PinkPaper…

So where does that leave us on the question of why the rioters refrained from looting and burning bookstores? The most likely explanation appears to be that the rioters were more interested in high-end clothing and electronics than books, for economic and personal reasons. But a Guardian article yesterday suggests the rioters may have been more principled about what they stole and what they didn’t than one might think.

Interesting. The image many people might have is that the rioters act indiscriminately, breaking and smashing things at will out of anger. But these different possible explanations suggest rioters follow some sort of logic. Yes, their actions fall outside the normal bounds of civil behavior but they are acting upon not-too-unreasonable logic (go for the high-end electronic goods). This reminds me of the work of Sudhir Venkatesh who suggests that gangs follow logical paths even though their actions may seem chaotic or unclear.

Perhaps I only think this as a sociologist or as someone who teaches research methods but it seems like these ideas about bookstores could be tested. Researchers could take different groups of people, perhaps split by socioeconomic status, and then give them a variety of free items that they could take including electronics, clothing, and books. Then, researchers could see what people would take and then could question them about their choices afterward. Of course, some of the same information could be obtained by asking this is a question or series of questions on a large-scale survey. These sorts of options could help provide some insights into where books fall among other desirable consumer goods. If I had to hazard a guess, I imagine American teenagers or emerging adults (18-29 years old) would also put books toward the bottom of the list of things they would desire.

Don’t romanticize the loss of bookstores: rue the loss of tax dollars and jobs

One response to the closing of bookstores is to lament the loss of a place to browse for books and drink coffee. But another reason to rue the loss of these stores is the loss of tax dollars and jobs. Here is how this plays out in Wheaton:

The eventual closure of Borders books will have an impact on Wheaton in terms of lost sales tax revenue and jobs, said Jim Kozik, the director of planning for the city. And replacing a large retailer isn’t easy in times like these…

Locally he said Borders absence will mean a loss of jobs, a loss of tax revenue for the city and a loss of lease income for the management company that runs the shopping plaza at Butterfield and Naperville roads. But he said the amount of revenue the city will lose is hard to quantify because it is not spelled out by state government…

Kozik said the city has had discussions with Anderson’s Bookshop, an independent seller with locations in Downers Grove and Naperville. But ultimately the talks didn’t produce.

With liquidation plans announced for Borders books, Wheaton could face having two large vacant former bookstores – the other being a space in the Town Square shopping plaza formerly occupied by Barnes and Noble. That store closed a few years ago, said Kerry O’Brien of the Wheaton chamber of commerce.

It is little wonder that more states are looking to gather sales taxes off internet sales. The loss of bookstores has an economic impact that is perhaps more important than the cultural and social implications of the loss of a potential “third place.”

This story is also a little more intriguing because it is Wheaton, a community that is fairly educated and yet has lost two big chain bookstores. If they can’t survive in Wheaton, where else can they survive? (I wonder how the Barnes & Noble in downtown Naperville is viewed.) In general, the Chicago suburbs are lacking in independent bookstores, a type of business that might mark a more educated demographic.

Acquire the bookstore chain to get the digital reading device

With the recent bankruptcy of Borders (see some reaction here), who knows how long Barnes & Noble might be able to hold on (and the news wasn’t good last August). But at least one businessman thinks B&N would make for a worthwhile purchase:

Barnes & Noble is well-situated to get a piece of the action: the company claims that the Nook already accounts for one-quarter of the e-book market. (Amazon’s rival Kindle product accounts for over 70 percent, although neither company discloses actual sales figures.)

Candidly, the Nook’s success is important, because more competition in the space will help keep prices in check and spur innovation. Sony also has a credible market entrant with its Reader product.

Malone’s company Liberty Media offered $17 per share Thursday — or about $1 billion — for a 70 percent stake in Barnes & Noble, a 20 percent premium over the Thursday closing price. Investors greeted the news warmly, pushing Barnes & Noble shares up over 30 percent — yes that’s higher than Malone’s bid! — in midday market action Friday. As a result, Malone will likely have to sweeten his offer to at least $20 per share.

In a statement announcing the offer, Liberty described Barnes & Noble as being at the “forefront of the transition to digital.”

While there is a lot of talk about how all of this affects bookstores and reading, I would love to see more about what this might mean for all brick-and-mortar businesses. The saving grace for Barnes & Noble is this particular digital reader which is well-positioned in a burgeoning market. In the near future, the B&N stores might disappear even as corporate name goes on through this device.

More broadly, how many other companies are actually creating digital content or devices rather than simply putting a Facebook page together and slapping the Facebook logo on all of their commercials?