Bookstore chains are undergoing a final shakeout
APPLETON, Wis. — This fall, at a moment when retailers traditionally look forward to reaping holiday profits, the owner of the fourth-largest bookstore chain in the country surrendered to the forces of e-commerce.
Book World, founded in 1976, sold hardcovers, paperbacks and sometimes tobacco in malls, downtowns and vacation areas across the Upper Midwest. It had endured recessions, the expansion of superstores like Borders and Barnes & Noble, and then the rise of Amazon. But the 45-store chain could not survive the shifting nature of shopping itself, and so announced its liquidation.
“Sales in our mall stores are down this year from 30 to 60 percent,” owner Bill Streur said. “The Internet is killing retail. Bookstores are just the first to go.”
As e-commerce becomes more deeply embedded in the fabric of daily life, including for the first time in rural areas, bookstores are undergoing a final shakeout. Family Christian Stores, which had 240 stores that sold books and other religious merchandise, closed this year, not long after Hastings Entertainment, a retailer of books, music and video games with 123 stores, declared bankruptcy and then shut down.
“Books aren’t going away, but bookstores are,” said Matthew Duket, a Book World sales associate waiting for customers in the West Bend, Wis., store.
Here is one way to measure the upheaval in bookselling: Replacing Book World as the fourth-largest chain, Publishers Weekly says, will be a company that had no physical presence a few years ago. That would be Amazon, which hav-
ing conquered the virtual world has opened or announced 15 bookshops, including at the Time Warner Center in Manhattan.
In a famous passage in Ernest Hemingway’s “The Sun Also Rises,” a novel that Book World used to sell, a character is asked how he went bust. “Two ways,” he answers. “Gradually and then suddenly.”
That more or less mirrors what happened to Book World and other chains.
A few years ago, ebooks were widely assumed to be driving the physical book — and the physical bookstore — to extinction. Instead, ebook sales leveled off, and the physical book has retained much of its appeal.
But readers are increasingly ordering those books online, getting them delivered with their clothes and peanut butter and diapers. Bookstore sales were $684 million in October, the Census Bureau said this month, off 4.6 percent from a year earlier and down 39 percent from a decade ago.
“There aren’t many businesses that can survive a 20 to 30 percent drop,” said Streur, 68. “Closing was the last thing in the world I wanted. But reality sets in.”
It was an abrupt decision that surprised even his 300 full- and parttime employees; a few said that at least some of the stores — especially those that catered to tourists — seemed to be holding their own. Book World had opened a store in Jefferson City, Mo., just a few weeks before.
But a search for buyers for the chain or even some of the stores came up short. The chain swung from a profit in 2014 to break-even in 2015 to a loss in 2016, although Streur declined to provide numbers.
“There was nobody interested in buying us,” he said.
A walk around some of Book World’s stores in its home state, Wisconsin, underlines the tough retail environment. The store in Mequon is in a strip mall with at least eight empty storefronts. In Oshkosh, the store is on the main street, but at 10 a.m. there was no foot traffic. The stores in Fond du Lac and Manitowoc were almost as bleak.
These streets look as if an overpowering recession had hit, but the unemployment rate in Wisconsin fell this year to a 17-year low. Mequon is especially affluent: Its household income is double the national average. This is Amazon Prime territory, its shoppers drawn to the fastshipping membership program that some analysts say half the households in the country have joined.
Because Amazon dominates online book sales even more than it dominates other online retail, its coffers will probably get a boost from Book World’s demise.
Glenn Butts, a flight instructor and pastor browsing among the bargains in West Bend, said he bought books “50 percent in person, 50 percent online.” In the future, he said, “it will probably be all online.”
Still, he had his regrets. “People are getting their information these days from God knows where,” he said. “You go into a bookstore to get something a bit more in-depth, to read it and digest it. That acts against fake news.”
Other customers remained resolute.
“I don’t like doing things online, so I won’t be buying books there,” said Susan Briggs, a former substitute teacher buying a collection of Emerson essays in Mequon. “Technology is going to be the downfall of civilization.”
Stoicism is a classic Midwest attribute, which probably helped keep Book World alive for years.
“Convenience changes our expectations, and then erodes our taste,” said Michael Schutz, who grew up riding his bike to the Book World in Portage, where he bought everything Stephen King wrote. That pushed Schutz to become a horror writer himself.
Looming over the fate of the stores is Amazon. Mark Dupont, Streur’s son-in-law and Book World’s senior vice president, said in an interview at the chain’s Appleton headquarters that he, unlike others in the industry, did not hold any animosity toward the retailer.
“To go online is so easy, so convenient,” he said. “To draw people into a store now is a monumental challenge. This is a huge sea change for retail. I don’t see any end to it.”
The biggest bookstore chain is Barnes & Noble, which has been struggling for many years and has closed about 10 percent of its stores since 2011. Its most recent shift was to go back to its roots and concentrate on bookselling.
Books-a-Million, taken private by its investors in 2015 after its market capitalization plunged, is ranked second. Half Price Books, many of whose books are secondhand or remainders, is third.
“The age of the physical chain of bookstores is behind us — unless you don’t need to be profitable,” said Daniel Goldin, the owner of Boswell Book Co. in Milwaukee, the sole surviving descendant of a local chain that began in 1927.
“You can never save enough money through centralization to be able to compete with Amazon,” he said. “Instead, you have to go in the other direction — be so rooted in your community you can turn on a dime.”