The Changing Scene

Once upon a time I used to take a free weekend afternoon and do a grand circuit of Manhattan bookstores, up 2nd Ave. maybe stopping at Black Orchid mystery store if it was open, two Barnes & Nobles on E. 86th St., thru Central Park, 2 B&Ns on Broadway on the Upper West Side, then the Borders on Columbus Circle and the Borders on Park Ave.

That was a long time ago!

Now, it's been months and months and months since I've been to the mega-B&N on E. 86th that replaced two smaller and inadequate locations.  But I needed to buy three books by a couple published authors who are talking to us, I decided to buy them the old-fashioned way, the B&N was supposed to have all three.

So up 2nd Avenue I went, for the first time in ages.

Sadly, the United Artists Gemini at 2nd Ave. and 64th St. closed quietly in the fall, there's a "for lease" sign touting the "unique footprint" for retail.  According to Cinema Treasures, the theatre opened as the Columbia in 1971, doesn't say exactly when it got the name of the Gemini, which is much more appropriate for a twin theatre.  It had two auditoriums, an upstairs with stadium seating in the rear section and a downstairs, both with around 400 seats and pretty good-size screens.  More important, unlike some other theatres of that vintage like the Coronet, which had stiff high-back seats and no leg room and was torture to sit in, the Gemini had luxurious seating rich with leg room.  It was a very comfortable place to see a movie.

I first went to the Gemini in February 1986.  Looking at the release date of the movie FX and thinking on the timing, I think there's a very good chance that I went there following one of my interviews at Scott Meredith during my job hunt after college, I don't think it was a stop after work in my early days on the job.  So there's some sentimentality just on that account.  But it wasn't the only movie I saw at the Gemini over the years.  Dirty Dancing was probably the favorite movie that I saw there, others include The End of the Affair, Total Recall, The End of the Affair, Adaptation, Closer, Crouching Tiger Hidden Dragon and more.

The theatre was in a stand-alone building.  The air rights were sold, and as part of the deal for building atop of the theatre, a small 3rd screen was added upstairs.  The Gemini wasn't a good name for a three-screen theatre, but shall we say that going from The Gemini to the UA 64th and 2nd is not change for the better?  What an awful name for a movie theatre.

With changing times, this neighborhood house that often had sell-out shows became very quiet, even though the Upper East Side is horribly underscreened.  I hardly went to the theatre at all in recent years, even though it was close by.  There was almost always a nicer place to go to see a movie in Manhattan, even though the Gemini was nice, there were nicer.  Also, Regal charges a Manhattan surcharge when using their discount tickets, AMC does not, so it would cost more to go to the Gemini.

The last movie I saw at the Gemini was Rock of Ages.

I keep track in my head of movie screens that remain intact from when I moved to NYC in 1986, with the loss of the 2 original screens at the Gemini, we're down 2.  (I think the others are 84th St. 6; Ziegfeld, original 3 at Lincoln Plaza, the Quad, IFC Ctr/Waverly #1, Cinema Village #1, the DW Griffith/Big Cinemas, Cinema 2, the Paris, the NY Twin/Beekman, the 57th St. Playhouse/DGA, or 22 in all.)

Moving onward, 2nd Avenue is a mess.  As they build the 2nd Ave. subway, around half the blocks from 60th St. to 86th St. have pits for building the tunnel and stations.  Businesses have closed in abundance where the construction blocks them from view.  Progress!

I went in to the Upper East Side Fairway for the first time.  This is where one of the two B&Ns used to be, in shared retail space with a Circuit City.  Fairway has taken over both spaces, is using the ground floor and basement, and the upstairs space that the B&N used to fill is backroom space for the grocery store.

The B&N, well of course it had only two of the three books it was supposed to have, 2 copies of the 3rd book supposedly came in back in July but are nowhere to be found.  It was very retro, checking a variety of wrong sections that the book might have been mis-shelved in before giving up on the idea of finding it.  In the early days of JABberwocky when I visited bookstores often and it was truer than now that I make my money a nickel or quarter at a time when people buy a book, I used to fixate on missing copies like these a lot more than I do now.  The joy of going to a Borders on Opening Day, and finding the two books of 70 of mine that were put in the horror or mystery section when they were supposed to be in SF.  Sadly, I may end up having to buy an e-book for book #3.

They had a book group event in the store with 10 people, yet B&N won't offer Manhattan signings for major sf/f authors like Peter Brett because they claim they won't get crowds.  I'm reasonably sure Peter Brett could get way more than 10 people to an event on the Upper East Side of Manhattan.

It's interesting to ponder how the me of 10 years will think back on the me of today, the way the me of today thinks back on those Sunday afternoon bookstore tours of the Upper East and West Sides, and if in 20 years the movie theatres I go to all the time now will have fallen out of fashion the way the Gemini did.

Irony at the Cash Register

So it's not all that long ago that we were told what a big mistake it was for Borders not to have invested more in the e-book reader business.

Now, after a confused holiday season where Publishers Weekly was running articles right after Black Friday telling us how wonderful the indies were doing with the Kobo and now runs an article to say "oops never mind" and where Barnes & Noble was touting its Black Friday success with the Nook and now blaming a drop in holiday sales on a huge drop in sales for the Nook, can we still say that the problem at Borders was failure to invest in an e-reader?  Barnes & Noble doesn't have much to show yet but a lot of red ink or maybe saying that things would even be worse for the retail stores if it wasn't for the Nook, and it's hard to know if there's any way to monetize the business.  Maybe e-readers aren't dead, but tablets are so much better and are now available at prices comparable to the earliest e-readers, not so much for the iPad but certainly tablets by other players that have a lot more resources to pour into the business than Barnes & Noble.  Are e-readers any good these days?  When I had a Kindle, it was better in the principle than in the actual experience.  I've never looked back since getting an iPad.  If the e-reader business becomes a commodity business of selling below $50 in order to compete with tablets, it's not a great business to be in.

I don't know if there's a direct connection between this and the investments in the Nook, but when it comes to physical books Barnes & Noble is now plagued by the same inconsistent selection as Borders was, even in its prime.  Will a store have a partial selection of Nightside, Secret Histories and Ghost Finders books by Simon Green, or will it have all the Nightside, all the Secret Histories, all the Ghost Finders, a few of the Deathstalker books??  Will it have a core title like Elizabeth Moon's Deed of Paksenarrion that is in its third decade and outselling a lot of today's hot young things?  Three Tanya Huff books or eight of them?  It beats the hell out of me. It doesn't encourage people to go and buy books at their local Barnes & Noble instead of buying electronically.  I don't buy the argument that since the physical bookstore chain can never compete with the wide selection of e-books it shouldn't even bother to try.

It was also a big mistake for Borders to have so many stores with such long leases, but that was always a bit deceptive.  If Borders were doing better, having long leases on good locations would be a good thing.  Barnes & Noble now has a different problem.  By keeping a tighter leash on its real estate portfolio, it has a risk of losing too many of its best locations and not having a good way to replace them.  Plenty of stores like the one in Union Station in DC or by Lincoln Center in Manhattan or in Reston VA or in University Village in Seattle that I'm reasonably sure were good locations and profitable ones that B&N would prefer to be in.  But you can't pay top-line rents selling books.

For all of these reasons, I'm not bullish on Barnes & Noble right now.  It's not going away tomorrow, or even in five years, I don't think.  But it just seems to be on that path.

However, my biggest concern about the business is that the infrastructure for selling physical books will evaporate way sooner than the actual demand for physical books, and that this is by far the biggest threat to traditional publishing than the change to buying e-books.

I wrote this post on Sunday for later scheduling, and then Monday we saw a retweet from Tobias Buckell to this post by the co-publisher of Melville House, similar in theme but a little more passionate, I get hurt indirectly when the big chains screw up, he feels it first degree.

One of the anniversaries of the many deaths of Borders

I should be reading a manuscript but it's late and I'm tired and it's not the right conditions for work reading.

So instead, let's reflect on one year of life after Borders. Technically I could do in September, but this week marks the real end, the week when the liquidation became official, when the theory of the Borders bookstore gave way to the going out of business sale.

And it still sucks.

To tackle some good news first, the end of Borders wasn't the end of publishing as we know it. I don't know of any publishing company that went under because they were left holding a bag with a hole in the bottom of it. At least not yet. I'm also not aware of any publisher with cash flow issues where our receivables get kind of long in the tooth that's had its circumstances improve over the past year.

But that's about the extent of the good news, that the Borders bankruptcy wasn't the start of some fancy game of dominoes where we could watch them all merrily go falling one after the other after the other.

So I should be happy, right. The business I'm in took one of the biggest hits it's faced in my quarter century in publishing and it's muddling along without disaster in its wake.

But...

The same store sales figures at B&N have increased by a very small amount, considering the number of customers and book sales that were up for grab after the demise of Borders. There hasn't been any rush of bookstores to fill the vacuums or the bookselling deserts left behind in Borders' wake. Some of this is because a lot of the sales could move to e-books, which are much more opaque to track still than print book sales, so it could be that the sales haven't gone so much as gone behind a curtain. But I still don't think of this as good news. One of my biggest worries is that the outlets for selling print books will disappear faster than the appetite for print books.

I can't go to bookstores any more. I used to spend a huge chunk of my life visiting bookstores, and I loved doing it. I felt a little empty when Borders was around that life and business had gotten busier to where I wasn't able to spend as much time visiting bookstores as I'd liked. But it turns out that was because I could visit Borders. Even in its diminished struggling state, even after all the management missteps and the remodels and everything else Borders did to make their stores less enticing places to shop, Borders had better bookstores. A better curated selection. When I could go to a Barnes & Noble and play compare & contrast I could tolerate going to Barnes & Noble. When the only bookstore option I had was to go to a Barnes & Noble, I couldn't bare to do it. Especially because B&N hasn't even been B&N any more. Once upon a time it used to be that Borders were the more interesting and sometimes better and sometimes worse stores while B&N was the boring consistent chain that you could count on to have a core selection from store to store. Now, the difference between the good and the bad B&N is as extravagantly bad as it used to be at Borders, with bad stores having half the JABberwocky title count of good ones and not having core selections like the complete Lost Fleet series or the complete Nightside series. By and large, I just get depressed.

I still drag myself into a B&N every once in a while, maybe tomorrow I'll drag myself in to the one on 46th and 5th since I have to meet a friend a couple blocks away. But there isn't any joy to me in visiting bookstores. It's all just work now.

And there aren't choices. Most indies have crappy sf/fantasy sections and don't give me much joy. The only place where people can go and buy a book in an old fashioned bookstore is a depressing boring chain that doesn't even offer the benefits of consistency the way it once did.

I still think of Borders when I think of the world. When the Silver Line on the Washington Metro starts running in very late 2013, that will be the line that was going to allow me get to the Borders in Tysons Corner more often. If they ever build a streetcar line down Columbia Pike in suburban DC, that will be the streetcar line that would have made visits to the Borders in Baileys Crossroads much easier. When I head to Chicago for WorldCon, this will be the WorldCon that won't finally give me a chance to get down to the Borders on Beverly in the far South of Chicago. I don't see dead people, I see the ghostly apparitions of the Borders that were.

Based on the timing of the first round of liquidation sales, I knew that the most likely last week for Borders would be the week I was in St. Louis for Bouchercon, and that this would make it very difficult to be the last person, turning off the lights, in a Borders somewhere. This proved to be correct. The only Borders accessible by transit from St. Louis was already closed, the signs already taken down by the landlord. The idea of taking a car service out to the suburbs was a theoretical one, the actual closing time for a store on the last day of business was a moving target. One thing to take the car if you knew you could get there at 8pm and hang around until 9, another when nobody could really say if the store would close at 2pm or 5pm or 8pm.

This still depresses me.

Part of me says it's just as well. It would have been horribly depressing going to a Borders and seeing the closed off sections of the store, the last dregs of the liquidation sale, the people scrounging around the dregs for some final bargain at 90% off. It would have been awful and sad.

But when a loved one dies, by and large you still feel that urge to be at the bedside to give your loved one a proper send-off.

And like a loved one that died after a long illness, the best memories I have of Borders don't date back to the days closest to its death. They date back to the mid and late 1990s, the earliest years of this century. The Borders that was still good enough that I could spend a day in 2002 traipsing by BART and bus and foot to the Borders in San Ramon and the Borders in Pleasanton and the Borders in Fremont and the Borders in Emeryville and feel like that was a really really wonderful way to spend a day and see the world one Borders at a time. By 2011, if I did a day like that it was because that was the kind of thing I did, because it connected me to that day in 2002.

But yes, on balance, I wish I had been at the bedside when the lights went out.

As it was, though I hoped maybe it wouldn't be, I kind of knew that my last visit to a Borders the week before the very very end had all of the depressing aspects of being at the bedside without actually being there. It was a struggle to find in the depleted selection that book that might be the last book I actually purchased for pleasure at a Borders. The one good thing was that it was the closest bookstore to my hometown, at the successor mall to the one that once had a Book & Record store, and later a B. Dalton.

But it sucks, it totally totally sucks.

It's a year now since we knew there'd be no Borders, since it became apparent that the white knight to try and save some semblance of the chain wasn't going to materialize.

And it sucks.

There are two other posts that I could do some day. One is the optimistic one, where I can talk about how recent months are showing how e-books and the internet really can help people find an author in a better and nicer way than the old-fashioned bookstore and the old-fashioned review outlets. Take that, NY Times Book Review! Who needs to worry about all the newspaper book review sections that don't exist any more when we have iO9.

Then there's the depressing post, about the total market failure of indie bookstores that don't care, publishers that don't help them, and which I'm supposed to love because why? and love the publishers because why?

Maybe some day.

Barnes & Borders

Publishers Lunch Daily has a list of Barnes & Noble locations that have quietly closed at the end of 2011.

The demise of their big and busy store in the University Village mall just down the hill from the University of Washington and its University Bookstore had been known to me earlier. But also of interest is that their store in Washington DC's Georgetown neighborhood has also shuttered.

Going back fifteen years ago in the earliest days of B&N's nationwide superstore expansion, they would take out ads in places like The New Republic to ballyhoo their wonderful selection, including of academic, scholarly U Press type books. Those two stores, University Village and Georgetown, were two of the half dozen or so locations that would be specifically included in those posts. So to see those two stores closing at pretty much the same time kind of brings down the curtain on a small part of the book superstore era.

The University Village store is one that I'll certainly miss as a literary agent for sf/fantasy. Not so much the one in Georgetown, which sold very little in the genre though it was overall still considered a kind of flagship store for the company and had a depth of inventory that went beyond what was justified by its sales. That store gave me "Evanston moments."

Because it was visiting Evanston, IL, I'd guess when I was over for WorldCon in 2000, that I first came across a Borders with a really really godawful surprisingly bad sf/fantasy section, which theretofore I'd never known such a thing existed, and then popped across the street to the B&N which had a much better selection, but you could tell by looking at the yellowed books and how they would have the 5th printing of a Deathstalker novel that was several months into a 6th printing that they weren't actually selling sf/fantasy but at least deserved credit for having the selection.

That was a strength of B&N for many years, to have a more consistent core title selection across their entire range of stores, and that was the Georgetown store, to go in and be grateful they were carrying a lot of JABberwocky titles but to be deeply depressed by the deeply yellowed tops of the books.

But to get to the actual two points of the post...

1. B&N is getting very Borders like in their selection now. They're no longer bothering with a core stock across the full range of their stores. It used to be, and I felt this lack of brand identity was a very big problem for Borders that did not serve them well, that I could go to the Borders in Commack and find half the selection of the Stony Brook store a few miles away, while the B&N gap was more like 2/3 or 3/4 of the title count in a bad store vs. a good one. Now, the Tribeca B&N carries fewer than half the titles in Union Square. The B&N in Bayside Queens carries only two of the six "Lost Fleet" paperbacks, and these are up there with the Nightside books as the top-selling JABberwocky titles after Charlaine Harris, Brandon Sanderson and Peter Brett.

Now, B&N doesn't have to worry about physical competition the way Borders had to worry about competition from B&N. But there is competition from Amazon. There's a school of thought that says it doesn't make any sense for B&N to compete with the long tail of Amazon because there's no way to do it so why even try, as a B&N you're selling something other than whether the store carries two Lost Fleet paperbacks or six. I'm not there. Cost of inventory in mass market is not a huge factor in the success or failure of your business, I still think if you're a B&N and you want to give people an excuse to get in their car and visit your store that you can't nickle and dime. B&N knew this once, and it saddens me that they no longer do. That said, times have changed, and maybe it doesn't matter the way it did six or eight years ago that your stores had full runs of the key series while the other guys did not.

2. I used to visit DC for a four day weekend in no small part because I loved to take the temperature of a very big bookselling market. I could easily visit 6 B&N, 8 Borders, a handful of Waldenbooks, a few Daltons, a handful of Olsson's, some Books a Million. I could easily visit a very very impressive 30-35 bookstores over a long weekend. Now there's nothing left to visit. The mall stores slowly disappeared. Then Olsson's went bankrupt. Then Borders started to close the underperformers before now closing entirely. And the Books a Million in Old Town Alexandria is gone as well.

So let's see, now on a DC visit I can go around and visit the Dalton/now B&N in Union Station, B&N on E St., Clarendon, Rockville, Springfield, Potomac Yard and Bethesda. KramerBooks and Books a Million in Dupont Circle. Politics & Prose. Whatever's before security at National Airport. So that trip's gone from 32 bookstores to 10. And really, not even that. Traipsing out to Rockville or Springfield made sense when I could visit both a Borders and B&N, not just to visit another B&N. Potomac Yard is a pain to get to without a car, I'm not up for that any more. Politics & Prose is a pain to get to and doesn't really have much of an sf/f section so what's the point. I used to think about dragging in some of these just to make the list of stores visited look very very impressive for claiming the trips as business. Now, I can go to DC and actually justify visiting all of seven bookstores that might offer a reasonable return on the schlepping.

Am I right to find this depressing?

Because that's one way to look at it, with each new bookstore that closes more and more of us can now choose to drive several more miles than before to visit a boring B&N that maybe doesn't even bother to carry the entire Lost Fleet series in mass market. [Another of the B&N that's said to have closed is their Westside Pavilion store just south of Westwood in LA; with the Borders having closed a year prior to the bankruptcy, this introduces yet another urban book-buying desert, with the closest stores now requiring a schlep several miles west to Santa Monica or east to the Grove.]

Intellectually, I know that we can also all now sit in our easy chairs and buy pretty much whatever book we want in a minute or two on our iPads or our Nooks, our Kindles or our phones.

But you know, even that kind of depresses me in a way.

the mournful dirge

Wrote this email to someone I know who worked at a Florida Borders...


Sorry didn't return your call, at a weekend long wedding with two days in office and to catch up on sleep before heading to St. Louis for Bouchercon where I am now.

Very sad. My last Borders visit last Sunday to Middletown NY between the wedding and the town I grew up in. I really wanted to be the last customer St a Borders as I was at 1003, but no way for it to happen,  Four of the StL stores already closed, two were going to close on Thursday but one shut a day early and the other as I kind of expected said "we may close in 15 minutes, we may close in 45," and i couldn't hire a car to take me ten miles into Illinois, wait around for who knows how long and in the process blow off the stuff I and to do at the convention.

Even though there was nothing to be done about it, I will feel like a loved one passed away without me getting to the bedside.

Then I go to the downtown Left Bank Books, it has one non-Charlaine JABberwocky book on shelves, typically indie it isn't Way of Kings or Warded Man or some other book someone may want to read but an obscure book that will be selling 7 copies a week on Bookscan if that once the liquidations are over.  There is no other trade bookstore for some four miles, the closest with any selection, i.e., a big BN, is further away than that.  Walked by Subterranean Books, the other major StL indie last night after it had closed, looked in and realized it wouldn't be worth another special trip to that neighborhood to actually walk into the store because it would be depressingly similar to the Left Bank experience downtown.

And speaking of Barnes & Noble, I can barely bring myself to walk in to one any longer. I go in, the first thing I see are the Nook covers. The boring BN corporateness, their strangely curated selection where they have long had the poorer selection of books/authors of mine not being carried by both chains, their ugly octagons with books buried on a shelf eight inches up from the floor, all of these things I could happily endure when I knew there was something better somewhere and that the BN I was just passing through.

But I will have a job, you leave the Dolphin with an uncertain destination, and I hope there will be some better next step ahead.  For you, for the other people gutting it out to the end for the hourly paycheck, while the bankruptcy court OKs $125K bonuses for Mike and the gang.   

My stock certificate is being framed, I overpaid for the store directory from base of escalator at #582, and purchased for $15 a "borders is 150k books, magazines, CDs, videos" framed poster with a big B on it from #592.  Once upon a time it was what the poster said, in another day or two it will be a memory.  If you find your way to NYC someday, we will have a cold something or other and reflect in front of my shrine.

Will give a ring when I am back home, and in the meantime you know my thoughts and wishes are with you.

oh, the entire sf/ f section at the downtown Left Bank is 96-ish titles n

B&N cuts back

So it's possible you've heard from different places, a blog somewhere or your editor trying to explain why your new offer is so low, that Barnes & Noble has cut back their orders.

Boy, are they!

B&N has long had a fixture called the New Mass Market Tower. It's the square thing that usually sits in the central aisle of the stores that's around six feet tall, four rows across and maybe eight or so down, with new mass market books.

A publisher pays to put your new mass market on the new mass market tower, of course B&N also has to agree they'd like it there because there are only so many books that can go on it over the course of the month and way more to choose from than that. But your publisher has to want it there.

And for all those years, it used to be that being on this fixture meant that pretty much every Barnes & Noble was going to get 8 copies of your new sf/fantasy book, other than for the really most awful stores for sf/fantasy where they would put in an initial order of 6 copies.

Those are nice numbers. You could certainly fill one pocket on the tower, maybe even fill two pockets, and maybe even have a copy or two left over to go back into the section.

Well, not any more.

Now a publisher is paying to get a book on to the New Mass Market Tower, and B&N is ordering 3 copies for the bad stores, 5 copies for somewhat better stores, dramatically fewer copies.

So, big picture, where once B&N might routinely have ordered 6000 copies in exchange for a New Mass Market Tower placement to cover store stock and a ready reserve for the warehouse, now it could be more like 4250 or 4500.

Little picture, let's look at those bad-in-genre stores that had gotten 6 copies and are now getting 3. Well, 3 isn't going to fill 2 pockets, so maybe you'll only get one. For thinner books, 3 copies might not even fill a pocket. Either way, there's no extra copy to go in section, so some dedicated genre fans who bee-line to the section might not notice your new book on the Tower. If one copy sells, all of a sudden there are only 2 copies in a pocket that can fit 3 or 4 so it's harder to see the book on the Tower, the display looks forlorn and lonely. B&N has a great supply chain and can get more copies of a new book from warehouse to store in a couple of days, but if demands at any of these stores is way stronger than expected you're still looking at maybe having only one copy for a day or two or maybe even going clean before the 72 hours it might take to get a box opened. To have this happening now... I can think of some B&Ns where demand might uptick because a nearby Borders has closed, it's a bad time to decide to be less robust in your ordering.

Will these things cost sales? Of course! If the initial order is down by 25%, if some stores are getting 50% fewer copies -- well, it doesn't matter if you have the same placement, this is going to have an effect.

But not to worry, you'll still find plenty of ways to accessorize your Nook.

Separation Anxiety

There just isn't much in my life so far that's leaving a hole in my existence the way the Borders bankruptcy is. Several years ago it would have been exciting on so many levels to see that Bouchercon is in Cleveland in 2012, and Albany in 2013. Never been to Cleveland, could have added at least a few Borders to my count, now I'm just looking at the date in early October and realizing I'd be going to Cleveland without even the chance of seeing a game at Jacobs Field, or whatever it is they're calling it these days. I need a new hobby, or something. And I can't see myself delighting in conquesting new art museums, or new Starbucks.

I wish B&N were any kind of a substitute, but it's not. And B&N is just getting more boring, less interesting, to me with each passing day. I've never liked their basic Front of Store fixturing as much, I hate those damned octagons. And they're reducing orders, reducing title counts. Their strength against Borders was that they did a better, more consistent job of stocking core series across a full range of their stores, they'd be the place that would have all the Deathstalker books and all the Blood books when Borders would be the place that had the weird gaps of not carrying books #1 and book #4 at various stores. Now I can't count on every B&N to have the entire Nightside series by Simon Green. Maybe I'm being old in my thinking, because Charlaine Harris and Brandon Sanderson and Peter Brett have stormed past my other clients, but I don't see Tanya Huff or Elizabeth Moon or Simon Green as doing appreciably worse now, not at all. They've been leapfrogged over, but I'm still reasonably certain that a typical B&N should have better selections on all three than they are. And even with Charlaine, B&N stopped carrying her Wolfsbane & Mistletoe anthology, which has been selling several dozen copies on Bookscan week-in and week-out without B&N, which means it should be at B&N.

So, no, I don't want to spend my life traveling around visiting B&Ns. With Borders, I could kind of afford to have the thrill of the hunt with walking into a bad one with a bad selection because at least I knew there was another chain with a more consistent selection, or maybe even a better Borders in the area. Now, if I visit a bad B&N, it'll just be depressing.

evolution in action

So I think it's safe to say that the main beneficiary of the ongoing disappearing act at Borders has been Amazon or other internet outlets for buying books (and probably not borders.com as one of those!).

Nielsen Bookscan gives breakdowns on sales in retail/brick and mortar channels as against sales in discount & other which includes primarily Amazon and bn.com. (Target and K-Mart are also in that line but for the typical new release sf/f hardcover these outlets aren't a factor.)

So we can look at the breakdown on launch week for those two lines and see where books are being sold. This also separates out e-book sales. Whatever people are doing there, wherever they're buying e-books, we are able from this to look solely at market share for new books in print format.

January 2010, launch week for Simon Green's Good, Bad & The Uncanny
Retail market share 54%

March 2010, launch week for Elizabeth Moon's Oath of Fealty:
Retail market share 44%

April 2010, launch week for Charlaine Harris' Dead & Gone paperback
Retail market share 43%

May 2010, launch week for Charlaine Harris' Dead in the Familly
Retail market share 39%
[and this is a book that would have been competing with mass merchandisers like Target and K-Mart as well]

January 2011, launch week for Simon Green's Hard Day's Knight
Retail market share 54%

these are all books that came out before the Borders implosion, a January 2011 release like Simon's would have been the last one for

March 2011, launch week for Elizabeth Moon's Kings of the North
Retail market share 32%

April 2011, launch week for Jack Campbell's Dreadnaught
Retail market share 32%

April 2011, launch week for Charlaine Harris Dead in the Family paperback
Retail market share 40%

OK, if you want to you can poke holes left and right in the argument I'm making. The only direct year-over-year 450-Borders-operating-normally vs. 200-Borders-in-bankruptcy comparison I'm making is with Elizabeth Moon, and one comparison is a point, not even a line and hardly a definitive trend. It's an anecdote. I don't know exactly how many of the copies that sold a year ago sold at the 250 Borders that disappeared over the year following.

But I've been in the business for 25 years, and I consider the year-over-year drop in retail market share for Elizabeth Moon to be jaw-dropping. It's not like people couldn't buy cheaper hardcovers on Amazon a year ago. It's not like the economy's in dramatically different shape now than a year ago, it's pretty shitty in both instances. And somehow or other, brick-and-mortar booksellers are losing huge market share to internet, and I'd suspect that it's the biggest such drop in percentage terms since Amazon arrived in business fifteen years ago, almost has to be since if you lose 10% of your market share every year for fifteen years you don't have any business left to lose. And the one big difference between brick-and-mortar and Amazon now vs. last year is those 250 Borders that went up and vanished, and it just seems to me to be abundantly clear that most of those shoppers haven't decided to drive an extra mile to find a B&N.

Let's just say I'll keep an eye on this!

And if you're looking at this and wondering if/how Borders can come up with a plan to reorganize, I don't think you'd feel encouraged.

Borders update

Borders CEO Michael Edwards gave an interview to the Wall Street Journal and the company also had a conference call with creditors, which was covered by Publishers Weekly and Publishers Marketplace. The company will soon decide, based on discussions with landlords, on the fate of an additional 25 to 75 stores that may close. Publishers Marketplace does a good job of putting this into perspective. The 200 stores liquidating now were all drawn from the not quite 500 superstores so it was a full 40% in the initial round, and as few as 145 of those 500 stores were solidly profitable. That is a scary statistic. These articles differ on whether it not there will be a round of closings for the smaller format mall and airport stores.

The company is getting supplied by major suppliers on a cash basis. It is begging for the major publishers to resume shipping on regular terms. Good thing to hope for. Costco will brag in its annual reports that it churns inventory so fast it is often getting paid by its shoppers before having to pay suppliers, Borders has to pay suppliers long before it gets any money from customers. Publishers Marketplace doesn't see why anyone would resume selling on net plus 30 when Borders had a 50% return rate then stopped paying then went bankrupt, but after a point if publishers want to keep a diminished Borders around they will have to take some risks on resuming normal trading terms.

While the company will continue to sell a variety of e-readers in stores it intends to fully invest its marketing and promo efforts in the Kobo. In exchange Kobo will give Borders a piece of all of its US ebook sales. Publishers Marketplace hates this, says selling the same old also-ran eReaders as it has been as it's fallen behind in the business is more of the same old. I disagree. Barnes & Noble isn't going to start selling the Nook at Borders. It can do so at Books a Million because BAM is still a smaller chain with a smaller selection with a much smaller national footprint while large parts of the BN business plan in recent years are driven by gains based on consolidation, I.e., Borders going away. Amazon isn't going to start selling the Kindle at Borders. The only good strategy for Borders is to be the one bookstore chain that offers eReader choice instead of our way or highway. The only choice is selling things that aren't Nook or Kindle. Getting a few pennies on every Kobo ebook sold could be a valuable lifeline to Borders especially as the cash needs of the company will be much smaller moving forward because of the reduced store count and reduced drain on resources from unprofitable locations. Kobo needs the Borders distribution channel, especially with its Australian business now hurting due to the RED Group bankruptcy there. This is an intriguing development, one of the better pieces of news in the Borders Bankruptcy stew.

As in any major bankruptcy that isn't pre-packaged there are disagreements over how much time to give current management to come up with a reorg plan. Creditors want June, Borders as late as August, looming over is when people can plan for holiday ordering. Creditors say the Borders Debtor in Possession financing is both too big for immediate needs thus costing too much in fees while not being big enough to finance Borders thru the holidays. Publishers Marketplace does point out the inconsistency.

Website, Borders says they have lots of visitors but too many of whom leave without buying. Well, they don't offer the level of discounting that BN and Amazon do, they can't afford to necessarily, I don't know how Borders turns this around. And I like the Borders website now.

For a typical 25k sq ft superstore Borders would like to have 15k devoted to books and 10k for other stuff. This doesn't bother me prima facie other than for the implication that it could be yet another round of remodels for a company that has already spent far too much money and energy rarranging the deck chairs. Borders says sales at ongoing stores have surpassed expectations. Publishers Marketplace interpretation: people have been showing up at those stores expecting a fire sale and stay to buy things anyway. There are times I like the added snark and analysis on Publishers Marketplace compared to the offend no one blandness of Publishers Weekly, but today I do not. Yes, Borders is in bankruptcy, has been run like shit, may not survive, but Publishers Marketplace is so snarky on Borders now you get the impression that their stopped clock wouldn't even be right twice each day.

quick newsy notes

Even though Barnes & Noble likes to brag about how wonderfully they're doing, the cost-cutting bug hasn't skipped over. Here Publishers Weekly discusses the impact on small presses of B&N's recent layoff of some four dozen staffers, including several long-time buyers and merchandisers which include the company's director of small press and vendor relationships. Holding to the truism that companies don't like to mayke announcements of bad news, there is no B&N release on the layoffs, their latest is to wax enthusiastic about periodical sales for the Nook.

The news from Borders is that publishers are supposed to indicate next week if they will trade their accounts receivable for a promissory note. And there were more layoffs at HQ. They raised some cash by selling their Day by Day calendar kiosk business to Calendar Club. Can't be much, though, because the kiosks are a seasonal business, and the business can't be much more than selling the rolodex of contacts to talk to about leasing space next year. Somebody I know who works at a Borders says they're on skeleton staff and still supposed to take out 80 more hours from the store payroll, and there's a big push to sell the Borders Rewards membership upgrades. I wish this process wasn't dragging on so long, annoying customers, employees, publishers, pretty much all of the so-called "stakeholders" as Whole Foods likes to call them. I suspect there are some ego issues involved. The very rich Bennett Lebow doesn't want to admit he made a mistake putting money into Borders last spring. Nor does the very rich and often full of dumb ideas William Ackman of Pershing Square Capital. They have too much at stake in a Chapter 11 filing, they're not afraid to have collateral damage in trying to avoid the filing. They're rich enough they can lean on a bank to refinance Borders, but the bank has to do something to make it seem like there's a good reason to put cash into the business hence the hard sell on the fig leaf of having the publishers share in the sacrifice. So it drags on.

The Queens Public Library is no longer buying books. They decided it was more important to keep staff and hours at the branches then to buy books to put into said branches, so until their funding renews maybe in July they've put a stake in the book buying budget. Ain't that cheery!

Borders update

According to this article on publishersweekly.com there is a bank willing to refinance Borders debt but with several strings attached, and one of those strings is for publishers to accept a note or bond for their delayed payments.

The only problem with this is, it may not be legal or kosher for the publishers to agree to this outside of having a court force it upon them, because it's then selling books to Borders on terms way different than the established discount schedule and terms of sale. Quoting from a B&N statement on the subject: "We think the playing field should be even. We expect publishers to offer same terms to all other booksellers, including Barnes & Noble and independent booksellers. We fully expect publisher’s will require Borders to pay their bills on the same basis upon which all other booksellers pay theirs. Any changes in publishers terms should be made available to all." And who can blame them. I'd sue, if I were some other bookstore, and couldn't get to turn my payments to a major publisher into a note that I could just dole out interest on for the next 8 years.

B&N also piled on by pre-announcing an announcement on Thursday regarding their holiday sales. Driven by the Nook, almost a 10% increase in same store sales, and Dec. 23, 2010 was the best date in company history. A caveat there, however, that B&N purchased the college bookstore chain so that they are now entitled to count hundreds of those stores in their sales tally which they couldn't count two years ago.

Borders also announced two resignations, neither of which has a press release on their website, and one of them particularly notable. Thomas D. Carney, the current General Counsel and one-time Secretary, has been a Borders office pretty much from the day the company went public around 1994. He's been in one role of the other through multiple bosses for a very, very long time. He is the embodiment of institutional memory at Borders. Well, he was.

Links, no sausage

Updated twice, final 4:07 EST.

The New York Times Week in Review section reprinted this Pat Bagley cartoon from the Salt Lake Tribune, which is one of the few comparisons in the TSA debate that I don't find utterly false. In fact, I find it rather funny.

In the midst of all of its columnists telling us to take our pats and shut up, their Sunday Outlook section has a column by Jeffrey Rosen that dares to flat-out call the current regime unconstitutional. And Rosen is not a hypocritical Republican, he's not some immature person for Ruth Marcus to yell at, he's a long-time legal affairs writer, a professor at George Washington School of Law, legal affairs editor for The New Republic, often published in the Times as well, check out his GW bio here.

Click here to find the 2nd quarter earnings release from Barnes & Noble. Same store sales were down a relatively modest 3.3%, loss was $12.6M, with the expectation that the lion and lamb will lie next to one another and sing songs together and join a book group together and make a perfect world as the company starts to realize sales first of the Nook Color itself and then from all of the ebooks that people will buy for their Nook Color. As initial evidence that this will indeed come to pass, they say after-quarter-end sales for the Fri/Sat/Sun after Thanksgiving doubled at bn.com and increased by an impressive 17.2% at stores.

Two articles I really enjoyed in the weekend newspapers.

The first is an article from the Sunday NY Times Business section about an etailer who thinks the more you can get your customers to complain about you, the more you can attract the love of the Google search algorithms.

And the second is from the A section of Sunday's Washington Post, which describes the efforts made to treat patients wounded in Afghanistan as they are moved from the front to Germany.

And also in the Sunday Times, Ariel Kaminer subjected herself to multiple patdowns over the course of her day. Her conclusion: "It’s amazing how quickly the pat-down evolves from shocking indignity to banal hassle, just like padding around barefoot while your pants fall down and your toothpaste tube gets the third degree, something airline travelers have been experiencing for years now. The inconvenience is worth it, of course, if it works — if it uncovers potential dangers before they board a plane. That’s what a spokesman for the T.S.A. informed me, afterward, the officers’ job was: to assess whether I posed a threat to aviation. He would not comment on whether that should have included checking out the objects hidden in my pocket. All I know is I went through the line eight times, and not a single inspector noticed them."

And last but certainly not least, The Washington Post has an ode to The Settlers of Catan, which is one of those board games I really would like to have somebody to play with someday. Boskone? Next Balticon??

the retail scene

Family business often brings me to the Hartford area, where the bookstores are longtime friends of a sort. 

First and foremost is the Borders in Farmington, store #55. Got to see it from when it was a construction site, when it was exciting to have a Borders move in during the dawn of the superstore era. It was the first of it's kind in the area, and it still does a decent business. And had a very decent selection of close to 90 non-Charlaine JABberwocky titles on the shelf. Like many Borders, not the business it did ten years ago. And like the Westwood store, which is of similar vintage, the box is too big. Back where the music used to be in the car rear corner, they have couches and chairs set up. But the space overhang isn't as bad as Westwood, the rent no doubt cheaper. I still like this store very much since it is big, full of endcaps and displays, lots and lots of books.  First in the wild sighting of Horns of Ruin by Tim Akers. 

Across the street, literally across the street, is a Barnes and Noble. It always seems dead. No customers. It had just over half the titles of the Borders, and some of those because they haven't sold in years but they're selling down to zero instead of returning to zero, so they just sit and sit and sit.  I cannot understand how this store stays in business. 

Just down the street is the Westfarms mall. In the days when malls had bookstores this had at least two, I a B Dalton and a Waldenbooks.  And the Corbins Corner strip mall across the street also had a Waldenbooks  And then several years ago and even a few years after the Corbins Corner store closed, Borders put a Walden/Borders Express back into the mall. It never seems to have any customers in it but must make some money because it still exists when 80-90% of the mall stores known to exist in the US have closed. Earlier in the year Borders put the mall stores on the same inventory system as the superstores, so now the books have inventory stickers which I can read. But how does the store make money?  Really cheap rent?? The landlord supports as a public service because rich people in West Hartford want a bookstore in their mall?

Once upon a time the Bishops Corner area of West Hartford on the other side of town had one of the earliest Barnes and Noble superstores, but that was one of the mistake stores from when they didn't know superstores had to be larger and more atmospheric than being larger versions of small bookstores. It closed years ago. And then BN decided to put a store in a new downtown shopping destination called Blue Back Square.  This is like many bookstores in rich suburban areas and doesn't sell much sf/ fantasy and also had around 50 non-Charlaine JABberwocky titles.  First in the wild sighting of Alcatraz vs the Shattered Lens by Brandon Sanderson.  Downtown West Hartford has a small indie I don't even bother visiting since it has a very small sf/fantasy section that isn't well curated.

On the other side of Hartford in Manchester the Buckland Hills mall approach has a Borders, #60, from about the same era as Farmington. Both part of the KMart triplets era, Farmington still with a Sports Authority in same shopping center, Manchester with an Office Max next door that is now an Office Depot and a Sports Authority around the bend.  Atop the hill in the mall proper there used to be a Waldenbooks that doldrums lots of books from a very small space, until the mall gave a secondary anchor spot to Barnes and Noble.

That B&N is now one of five test stores for an educational games section that has taken over the music and movies area. All the Lego you could want, lots and lots of Lego.  It looks nice, I would even go to B&N over a Toys R Us to buy Duplos. It can't do worse than the shrinking music and movies section. Since these items are bigger than shiny disks the section doesn't need a separate security system and register and dedicated employee to keep shrink to a reasonable level, which could save upwards of $3M in personnel costs over the course of a year. It is more open to the rest of the store. Would maybe like e section even more if I were part of the target audience for educational games.  

The Borders always seemed dimly lit to me, and over the years started to look dingy. It was very late to being renovated three or four years ago, maybe they had a fifteen year lease from 1992 or 1993 and held off pending a renewal?  Add to that the overall woes at Borders and it is no surprise that business has slowed. It has gone from being a quietly respectably strong store to being more 40th percentile, if I had to guess. But to judge from the amount of the science fiction section in upstock (I climbed the ladder hoping nobody would notice to bring down 2 Trading in Danger, 3 Way of Kings, a Warded Man, a Poltergeist and a Moon Flights), this is one of the stronger sections for the store. Also, the store was always smaller and has a mid-range music and movies selection, so it doesn't have the empty space issues of Westwood or Farmington and other larger Borders boxes of this era.  Bottom line is that the Borders still has a larger selection of JABberwocky titles, around 80 vs 70, but the BN is new and shiny. But at least the Borders seems to have settled into a stable if smaller business, even if not the business of 10 years ago.  

Borders has been trying very hard to have a good holiday season. In stock guarantee, price guarantee, returns thru January 30. Lots of couponing including a Black Friday insert in 28 markets. Years past they had lists of books, DVDs and CDs at huge discount prices, this year you could an item of your choice at 50% off. Which is crazy, selling an item below cost, but at the same time less crazy than allowing people to buy 8 items at below cost and nonetheless more alluring because you get to choose. 

The list of Borders stores closing in coming days also includes downtown Portland OR (#65), Farmington Hills MI (#77) and Chestnut Hill MA (#17).

Portland was a major flagship downtown location which always struck me even several years ago as having not quite flagship sales, and I am sure was at the end of its lease and not worth renewing.  There is a wonderful Borders in Gresham in the Portland suburbs that did more business with I am sure less rent.  The flagship Powells is .6 miles from the Borders. Should downtown Portland have only one bookstore or is there an opportunity for Powells to open a satellite in another part of downtown or for another bookstore with a lower rent to make a go of it?

Chestnut Hill was one of the oldest Borders stores, maybe at one time a books only location that expanded into a neighboring space to add a music section. Like West Hartford in a rich suburban area that was absolutely a dead zone for sf/fantasy, an absolute absolute dead zone, and I am not sure how well it did in other areas. It is in a very tony mall. I have a feeling it had a decent rent from when it was first leased in the early 1990s and maybe not so decent a rent to renew in this upscale rich suburban mall.  So it will close. I kind of liked it once upon a time because Borders #17 did have a certain character to it, but over the years Borders spent lots of money to remodel the character out, Cheesecake Factory opened in downtown Boston, and not worth the schlep to travel out to a store that didn't sell any sf/fantasy. There is a BN down the street that also doesn't do much business in sf/f, so the people of Chestnut Hill will not starve for books.              

Borders Westwood

I just updated a blog post about bookstores that are set to close, and as promised I wanted to talk a little more about the Westwood Borders.

This was one of the very first Borders to open in Southern California, store #56, and one of the very first Borders I'd ever visited on the West Coast. That would have been in 1996 when I went out for the WorldCon in Anaheim, and made the rounds of what was then a relatively small selection of stores in the earlier days of the book superstore era. If memory serves, Borders in Westwood, West Hollywood, South Bay/Torrance and Brea would have been on the list.

It wasn't a great store for sf/fantasy, but it was a major location. I mean, you didn't have a lot of superstores then, they were big news, and this one was huge. Lots of room for books, for music, for videos, for everything. A United Artists movie theatre triplex was on the next block. Godawful underground parking garage, personified why I've enjoyed LA more now that I'm not renting a car.

But oh, how times have changed.

How many 1980s era sloped floor multiplexes are still around? They sucked, most of them. The screens weren't that big, you could hardly see over anyone in the next row. That UA multiplex next door to the Borders is long since a drugstore. A few miles south on Westwood Blvd. there's a fancy new Landmark Cinemas. I'm sure the loss of the movie theatre hurt traffic at the Borders.

There were three times as many Borders in southern CA in summer 2008 than in summer 1996. And B&N as well. Guess what's next to that spiffy new Landmark Cinemas a few blocks down Westwood Blvd? A spiffy newer B&N!

And then there's that whole Borders: Books Music Movies kind of thing that you had going when the Borders in Westwood opened up many many years ago. That's why the store was so big, after all. Because it had a really big book section, a really big music section, a really big movie section. In a 25,000 square foot store as Borders has been downsizing the music and movies sections at most locations in the past five years, they could put in a little toy/game stuff and a bigger bargain books section and kind of fill out the space. There was no possible way to do that in Westwood. You can't justify expanding the book section when people are migrating to e-books, this store was made for 1995 and now its 2010, and Borders had no idea how to fill the space in Westwood. So they didn't. The last renovation they just took some bookshelves, blocked off a big section of the upstairs, at least 1/8 maybe even 1/6 of the total square footage of the store, and called it an "events area." Where they really didn't have very many events.

Well, you can't run a business too well when you're renting 35,000 square feet of space for something you can do comfortably in 25,000 square feet of space.

And in the mid to late 1990s, Borders built a lot of very big boxes. With their same store sales drops in recent years, some of those big boxes could be doing two-thirds the sales per square foot of five or eight years ago.

I'm extremely saddened to see the Westwood Borders closing. It has been a part of my life for fifteen years, not a big part but a kind of comfort to knowing that it was there waiting for me.

But if Borders is going to be around five years from now, they've got to find ways to downsize large chunks of their real estate portfolio, or they've got to hope a whole lot of people have a deep and abiding urge to build their bears at their local Borders, because there is no way there's a viable business in five years selling books, music and movies in a lot of these stores at their current square footage. Many of the Borders which are confirmed as closing I haven't been to, but the Thousand Oaks store was another big and uneconomical box certainly.

B&N hasn't been hit quite as badly by this because their movie and music sections in stores that had were generally much smaller. They are now hoping to fill some of these sections with expanded toy and game boutiques. A B&N in Manchester CT that I will see during Thanksgiving week is one of the test stores for this section, and I'm looking forward to checking it out. And I've devoted most of this post to the problems at Borders, but don't think that B&N, even with the Nook, is immune. Does your local B&N look like it did last year? No way! They've added their Nook boutique, and more toys and games are on the way. Borders has bigger problems and more vulnerability, but if bookstores are going to be around in 2015 they can't look like they did in 1995.

It is a little bit frightening to think in a capitalist world just how quickly things can change. In the 1980s, the sloped floor six-screen cinema was really quite the big deal. Ten years later, the Borders in Westwood was quite the big deal. I hope the book superstore will have a bigger, longer, better run than the sloped floor multiplex, but there are no guarantees.

You can read here the latest earnings release from Books a Million. Same store sales down 5.8%, a small loss in the pre-holiday quarter, as weak hardcover sales don't compensate for strength in areas like bargain books. I've posted here about the declining hardcover sales we're seeing on many books, and the uncertainty of just how many are lost and how many are just migrating to e-books.

closing time

News is trickling out here and there of bookstores that are set to close after the holidays or even before.

Here in New York, there's a big flagship Barnes & Noble by Lincoln Center that will be closing after a 15-year run with the expiration of its lease. A fashion discounter called Century 21 quickly leased the entire space.

Joseph Beth booksellers has filed Chapter 11, and will be closing half its stores. They owe millions of dollars to Ingram, hundreds of thousands of dollars to Random House, and more. This is a real shame. I went to Pittsburgh a few years ago when Brandon Sanderson did a signing at their store in Pittsburgh that will be closing. It was a great store with great staff.

Joseph Beth shares some lineage with Borders. In the dawn of time at Borders in the 1980s, Borders licensed its inventory system and may have even done warehouse fulfillment for some independent bookstores in the midwest, and if memory serves Davis-Kiss was among the chains they were doing this for. Joseph Beth purchased Davis Kidd several years ago and a DK location is among those closing as a result of the bankruptcy filing.

And in Charlotte, NC both a Joseph Beth and a Borders will be closing.

Besides Charlotte, I'm sad to see that the Thousand Oaks, CA Borders which was my 200th visited is closing down. Word is also coming out of store closings in West Windsor/Princeton Junction NJ and Bloomington IN. Their store on Chicago's Michigan Ave. will close, but this is one year later than originally planned after a last-minute lease extension. One write-up in Publishers Marketplace said Borders may be closing two dozen stores, but I'm not finding that many with the news already out.

The early and mid 1990s were peak times for opening superstores, so with 15 year leases from 1996 and years of declining sales, no real surprise Borders has real estate that it can't justify keeping. But it's sad.

On a happier Borders note, Borders does have 25 "pop-up" Borders Express stores in place for the holidays, full list in their press release here. This is a very good idea, to take advantage of the peak holiday shopping season and empty space at the local mall to broaden reach profitably.

With the Thousand Oaks Borders closing, good news that a nearby Barnes & Noble in Calabasas, CA that had been threatened with closure ended up having a new lease agreed upon. That has the same landlord as the B&N in Encino, CA, where the neighborhood protested its replacement by a CVS. This may be the B&N where Alan Ball found a copy of DEAD UNTIL DARK while waiting for a dentist appointment, so I'm particularly saddened that a historic site may be going. There's a store in southern Ft. Worth that appears to be on the way out. Will that help the Borders that's up the street a bit, i.e., can some of these store closings help those that remain or are we all doomed? And also a B&N in Hobart, IN, and one in Fremont, CA that is across the street from a Borders that could no doubt use a business boost.

And updating this on November 19 2010, thanks to a report in Publishers Marketplace, they have gotten confirmation from Borders that approximately 17 stores will be closing. They don't yet have details on all, but have confirmed additional locations in Marlton, NJ; Westwood, Santa Barbara and Carlsbad, CA; and Overland Park, KS. According to the Borders website, the Overland Park store was #23 and had been around for over 17 years, so likely similar for Marlton (#26). The Santa Barbara store was #123, so that would also have been around quite a while. I'm going to do a separate post about the Borders in Westwood.

news of the day

Borders announced it's earnings, or more exactly the size of its loss for the most recent quarter. Same store sales dropped 7%, not good, but not as steep as other recent reports, but would have been worse if not for an uptick in cafe sales.  Web site sales increased by big percentage but from small base.  They are closing a store in San Francisco near the Giants' ballpark, and are happy to have around a half dozen other leases for underperforming stores like this, DC store I blogged about a couple weeks ago etc. I haven't visited this SF store, may try on my layover heading back from WorldCon. And good or bad, Borders will open Build a Bear workshops in some of their stores. There is now also a two-tier Borders Rewards program, a paid program like the Barnes & Noble program which will offer more discounts, free shipping etc.  while also continuing the current free program.

In other store closing news, Barnes & Noble is closing its large flagship store opposite Lincoln Center on Manhattan's Upper West Side.  The store's original fifteen year lease is expiring, and rumors are the asking rent was at least doubling and maybe tripling. This is the 4th Manhattan BN to close in the face of larger rent in recent years.

On the eReader front, Samsung is introducing a reader into the UK market that will be sold via WH Smiths, which runs many travel stores that tend to be small and some much larger stores on malls and main streets, or "high street" in the local parlance.   Amazon is supposedly making an arrangement with Staples to start selling the Kindle.     

business quick takes

As I type this I'm a few hours away from boarding a plane to Melbourne, Australia for WorldCon with some travel Down Under following.  I may not be able to do all the cross-linking and such I try and do usually because the Blogger site I post in is a little more cumbersome to use on an iPad. This post an example of that.  But I will try and do some posting.  

A few business things to mention before I go...

Borders is going live with their AreaE sites this week, and we've been watching them go from big red tables to more fitted out but I'll be away for the official launch. Not impressed. At some stores these big red tables are replacing and thus doubling as the information desk, so customers trying to test a Sony or Kobo will compete for attention. Can't wait to see how that works on 21 December. And even where the table is dedicated AreaE most of the table space is taken up with computer stations, not eReader display space. The center of the table will have room for a few display units of eReaders surrounding a riser with info posters like "download our app.". Nothing like what Barnes and Noble is doing with their Nook desks. I thought they had an intriguing approach of how to contend in the eReader space in spite of being late to the party, but the way AreaE is looking so half-assed it's like they think the war is lost and are fighting for appearance's sake and that alone. 

Andrew Wylie, a major literary agent who recently started his own ebook company, has settled his dispute with Random House over rights, rumor has it ceding the rights battle but getting a higher escalating royalty rate.  Well, those royalty rates have to start going up if agents and authors are to continue to do as much business with publishers, we'll see how many other circumstances Random may need to do similarly.  I spoke in more detail on these questions in a guest post I did for the Clarion blog, which I linked to in an August 17 post.

Barnes and Noble is in the middle of a proxy fight with an investor group having proposed an alternate slate of directors.  Their last earnings report didn't thrill, same store sales down a bit and profit taking a hit from digital initiatives. 

The Kindle 3 has gotten rave reviews from David Pogue in the NY Times and Walter Mossberg in the Wall St. Journal, both major people in technology reviewing. I am not a fan of E-Ink based devices like the Kindle vs iPad multitaskers, but no denying that the reviewer buzz for Kindle 3 is there.     

blatant linkage

My client Tim Akers took some time away from his work on Dead of Veridon to give us his thoughts on the Nook he got for Christmas. Click here and enjoy. And then you should enjoy Akers' debut novel The Heart of Veridon, which Library Journal has rightly hailed as a key title in the modern steampunk movement, and then reserve his forthcoming The Horns of Ruin. We've heard of sword and sorcery, or s&s, and now we add the third s of steampunk to create a fully-realized s&s&s fantasy which people are giong to be talking about come November.

He mentions an article in the NY Times today by Randall Stross, an author on hi tech topics. I, like Stross, don't see the dedicated ebook reader as a lasting technology, that being said a lot of people are betting a lot of money that Randall and I are wrong. And Randall gives a lot of attention in his article to Amazon's notorious tendency to say lots without saying anything. The only problem here is that Amazon has actually sold a shitload of Kindles and I do see them all over the place. So Amazon might be coy on giving hard sales #s as a matter of policy or of habit, the iPad may be selling on a much quicker pace than the Kindle when it launched at the end of 2007, but they've still sold a lot of these suckers, they've sold a ton of books for people to read on these suckers, and Randall and I might be entirely correct that this isn't what people will be reading on in 20 years but certainly near term the Kindle is an important part of our lives. I'd have come across this article when I read the hard copy of the Sunday times, but I first saw courtesy of a tweet from Tobias Buckell, who is settling back from Gencon.

The retail front

So let's see what's happening this week in the world of e-books and retailing.

Borders officially launched its e-book store today and has new low prices on the Sony Reader in their e-reader department, which is also charging forward and looking toward the opening of in-store AreaE sections in stores next month where people can play with the Sony, Kobo and Alutek devices, promises of more to come. Their goal, expressed in this news release, is to gain a 17% market share in e-books.

And now here's an article from Publishers Weekly, reporting on a Barnes & Noble investor conference presentation. An article in the print edition of PW this week further elaborates, saying B&N claims a 20% share of the e-book market currently compared to a 17% share of print books, that they now sell 80% of their Nooks in retail stores vs. internet, and that currently print retail accounts for 90% of book sales but will drop to under 70% by 2014. Even though they see brick and mortar sales diminishing, the current economic situation is allowing them to renew leases at lower rents, so they don't expect to close more than 35ish stores over the next few years.

They also think e-books will be great, opening up sales of more books to more people just like mass market paperbacks did 50 and 60 years ago. I'd like to think they're correct, but as I discussed a bit back B&N is very optimistic about a lot of things right now because management is trying to preserve itself against a corporate raider.

And the other bit of news from Publishers Weekly is that Books a Million has quietly started its e-book store.

Well, it's all very exciting and interesting to watch.

And in closing here is a review of the Kobo from the wonderful Jessica Strider, who helps make World's Biggest Bookstore a must on any trip to Toronto, and made me very jealous with her recent vacation reports.

E-Reading

So the Father's Day advertising war for various e-book devices, including the Kindle, Nook and iPad, was followed by the after-Father's Day price war. B&N came out with a bare-bones Nook that sells for $149 but has only Wi-Fi access, i.e., no 3G or no downloading a book anywhere with a cell phone signal. The fully-equipped Nook was also given a price cut. Amazon immediately responded by dropping the price of the Kindle to $189. Borders was already starting to sell some e-book readers, including first shipments in time for Father's Day, for $149. They're now offering a $20 gift card with that, and double Borders R Reward bucks. Since you get $5 for $150, then buy this and a truffle ball and your net price for the Kobo eReader becomes $120.

One article I read says that B&N is now making more Nooks than Amazon is Kindles, so they seem to have some quiet success leveraging their store presence to sell the e-reading device. And Apple has sold over 3 million iPads in just a few months, even though it's impossible to actually buy one anyplace because they're in a perpetual state of being sold out. Nobody knows how many Kindles or Nooks have sold, but the combined total would be well up into seven figures.

In part, this is a natural thing in consumer electronics. As more and more are being made and purchased the component price goes down and the fixed costs are more easily leveraged and the price comes down.

But there's also more flexibility on the gadget price because of the switch in pricing on the e-books. Last year Amazon was paying $13 for a DEAD AND GONE e-book and selling it for $10, losing money every time out. This year, DEAD IN THE FAMILY is now publisher-set at $12.99, and Amazon gets to keep $3.90 of that. When you make $4 on every book instead of losing $3 you can price the gadget for less.