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Shelf Control

In sync with the general homogenizing of American towns, Athens has recently welcomed another Wal-Mart, Barnes & Noble and Starbucks. The trend continues as next month, the multimillion dollar corporation Borders Group, Inc. opens another of its Borders Books & Music stores in the Colonial Beechwood Promenade Shopping Center on Alps Road. Including Books-A-Million, in town since 1995, three of the four largest bookstore chains in the country now have locations in Athens.

Books-A-Million calls Birmingham, Alabama home, but operates 182 stores in 17 states and includes Joe Muggs Newsstands and Bookland stores. New York-based Barnes & Noble, combined with B. Dalton booksellers, manages almost 1,000 U.S. stores. Borders Group, Inc., with its origins and headquarters in Ann Arbor, Michigan, owns over 300 Borders stores in the United States, plus a dozen stores overseas in four countries, as well as approximately 900 Waldenbooks nationwide.

These large chains present competition that has resulted in the demise of independent bookstores across the country, resulting in loss of character in individual communities.

Not Worried

Independent book and newsstand merchants in Athens, however, remain optimistic in the face of corporate saturation of the market. The lack of anxiety is explained in large part because the independent bookstores in town deal heavily in used and remaindered books, which are not found in the megastores, and so are not an aspect of competition. Merchants are also remaining calm in light of what each perceives as a loyal customer base that can be counted on to sustain them. Many also feel that the location of their business rivals that of any chain.

Book Peddlers, also located in Colonial Beechwood Promenade, for example, sells mostly remaindered books, which are the large chains’ leftovers that have been returned to publishers and warehoused, then sold at a significantly lower price. Book Peddlers also buys “hurt” books, hurt being “a wrinkled cover or a tear,” explains Lara Goode, store manager. Goode estimates that about 10 percent of their stock is new. “We carry all the local authors and… those books are new.”

Goode admits, “We’ve felt it just a little bit each time one of them [the chains] has moved in” but, she adds, “our regular customers start coming [back] in our store… when the newness wears off. We’ve got very loyal customers… I’m not shaking in my shoes that they’re [Borders] coming.”

Diego Kirsch opened Above Bookstore and Coffeehouse in February above his four year-old Athens Antiquarian Book Service on Baxter Street. He says of the upcoming Borders, “It’s just going to bring a bigger book crowd into my area. I sell used and out-of-print books – I don’t sell anything new… They’re bringing in a café up the street from me that might affect me, but I really don’t think so; I serve a different clientele.”

Tony Arnold, formerly the store manager and now the new owner of Jackson Street Books, a used bookstore in business for 15 years downtown, does not regard Barnes & Noble or Borders as a threat. “We’re not directly competing with them. In fact, we kind of welcome their presence because they tend to put more books in the local market, which eventually end up coming through our doors.” But, he concedes, “I can definitely see where the corporations are a threat to independent booksellers.”

Blue Moon Books, located at the corner of Clayton and Jackson streets, began ten years ago as a used book store, but now carries 80 percent new books and so is perhaps the most at risk against the megastores, although owner Judy Barnes is not worried about the life of her business. “I don’t do it to make money anyway. I’m lucky enough to just be doing it because I love it.” Of her customers she says, “I’m pretty lucky just being downtown. We have a really good location. None of them [the chains] are as close to downtown or the university as we are, so that brings in a lot of tourists that they probably don’t get. I like to think we are more in the heart of things. We get all walks of people from all over the world who are visiting the university in some capacity: students, parents, people who are touring. We really have all of humanity at some point walk through the doors.”

Barnett’s News Stand on College Avenue, which sells mostly periodicals but also newspapers and books, has been in business for over 50 years, says current owner Midge Gray. She is not especially concerned by the chain bookstores. “We have a great location, and we have a lot of loyal customers who’ve been coming in here for years and years and years. We’ve seen a lot of change downtown and with the mall. We’ve weathered that. We’ve seen all the changes come and go, and we’re still here.”

Neither Barnes & Noble or Books-A-Million appear worried about Borders’ competition. Eddie Suttles, Community Relations Manager for the local Barnes & Noble, which opened its doors in Athens last September, explains, “Athens is a big university town, and because it has such a huge arts and literary community, there’s really… ample room for everybody. There are so many things about Athens that make being here easy,” including the university, the local authors, and the two presses in town, Suttles notes.

Laura Gregory, manager at Books-A-Million, states that “in all our other markets where they’ve come in… Borders has really never been a problem for us, for our chain.”

Only time will tell whether these merchants’ optimism is warranted. That the success of the large chains has had negative results for smaller bookstores in some American towns is indisputable. As the Los Angeles Times reported in April 1998, “Some of America’s best-loved bookstores have succumbed to the chains’ [Barnes & Noble and Borders] economic pressures, including Shakespeare’s on Manhattan’s Upper West Side, The Guild in Chicago and the Westwood Bookstore in Los Angeles.” In the last decade, independent booksellers have lost 40 percent of their market share to the chains. Why?

Stacked Deck

One major problem for independent booksellers is the way in which the publishing houses conduct business with them versus with the corporate chains. Melissa Tufts owned Athens’ beloved Old Black Dog bookstore in Five Points from 1985-1996. Contrary to popular perception, she says that her store was not “put out of business,” but that she decided to close the store and pursue other interests at a time when the store was in fact doing well enough that it could have been expanded. But because of her experience in the industry, she is able to assert that “the publisher determines the consumer’s price and the retailer’s price for the book. I know of no other commodity where the supplier tells the retailer what to charge for an object, giving it a universal price tag, then can turn around and sell the thing at different rates to different stores. The publishers sell their books to the chain stores at a cheaper rate than they sell them to independent stores. They pay for floor space in the [chain] stores, and they underwrite advertising campaigns. The world needs to know this and understand what a blow this is to independent, free enterprise.”

In fact, just such unfair trade practices are the basis for a lawsuit pending against Barnes & Noble and Borders. The plaintiffs are the American Booksellers Association (ABA) and 26 independent bookstores located in 17 states plus the District of Columbia. Filed in a California federal court in March 1998, the lawsuit alleges that the nation’s two largest book retailers have “engaged in a pattern and practice of soliciting, inducing, and receiving secret, discriminatory, and illegal terms from publishers and distributors.” The lawsuit lists benefits it claims are enjoyed by the chains but denied to independents, including discounts in the purchase price of books, monetary incentives for selling certain titles and special pricing given to new stores. The ABA believes these practices amount to violations of federal antitrust and state trade laws, including the Robinson-Patman Act, the main thrust of which is to make it illegal for a supplier to charge lower prices to certain customers simply because they purchase in larger quantities than other customers.

However, the government rarely enforces this statute, and the chains’ attitudes in response to the lawsuit perhaps reflects their comfort in this. Both chains deny any wrong doing. Borders Books & Music former president Richard Flanagan has been quoted as referring to the claim that the chain puts independents out of business as “urban folklore.” Kendra Smith, spokesperson for Borders Group, Inc. at their Michigan headquarters, would not comment on the lawsuit.

Regarding his familiarity with the lawsuit, local Barnes & Noble’s Suttles says, “There is a case pending – something to do with unfair practices with larger publishers – but… the charge has been there for several years, but nothing’s come of it.” Asked whether he feels the charges are just, Suttles responds, “No, absolutely not” and elaborates: “Quite simply, what Barnes & Noble does is sells books, and that’s essentially the bottom line. It tries to give its customers as big a selection of what it is they’re looking for as it possibly can for the best price it can.”

But the chains may not be as untouchable as they appear. The American Booksellers Association, which describes itself as a “not-for-profit trade association representing independent bookstores nationwide,” has been successful with similar litigation in the past. In 1994, they sued Penguin Books USA and other publishers, alleging the same antitrust violations as in the current lawsuit. In 1997, the ABA and Penguin reached a $25 million settlement, with affected independent bookstores receiving compensation from Penguin in amounts ranging from $1,000 to more than $14,000 depending on what proof of violations the stores could show.

Although there are only 26 stores as plaintiffs in the current lawsuit, there is an important sense in which all 4,500 members of the ABA are being represented by them in this lawsuit. As Barnes & Noble and Borders continue to grow, more independent bookstores across the country may be affected by their alleged violations of antitrust laws. As ABA member and Blue Moon Books’ owner Barnes says of the spread of the chains, “It’s sort of inevitable. It’s happening all over America with Wal-Marts and McDonald’s and Barnes & Noble… Everything eventually will just all be the same… There are a few things the ABA is trying to do to counteract some of [that].”

The current lawsuit against Barnes & Noble and Borders goes to trial in April 2001.
The average customer is likely ignorant of such lawsuits and in the midst of these unsettling legal actions, customers continue to flock to the chains. As Suttles comments on the local Barnes & Noble, “We’ve had a really great reception since we got here… I think it’s been pretty amazing. I know there’s a lot of activism in the town… about what companies come and so forth… but we’ve been, I think, warmly embraced.” In fact, Suttles says the Athens store’s preview party in celebration of its opening “set the all-time company record for attendance and participation.”

Why Chains?

Barnes & Noble and Borders, then, must be doing something right. Tufts says she is “always surprised by American consumers, who in so many ways celebrate their individuality, yet find pleasure in gigantic, predictable, cookie-cutter stores like Barnes & Noble and Borders.” The chains have attributed their success to their vast selection, prices, cafés and community involvement. “Borders not only provides the ultimate experience for book, music and coffee lovers; but the retailer also fosters a deep commitment to its communities,” reads an August 2000 company press release. But what Borders calls the ultimate experience, some customers just call an experience.

Athens resident and bookstore customer Lamont Antieau explains: “In a place like Jackson Street Books, I get a sense of my own identity, because I’m in a place that has an identity. I can get lost in a book at Jackson Street Books, and when I look up to take inventory of where I am, I know exactly where I am, because I’ve never been in this place anywhere else: I’m in Jackson Street Books, Athens, Georgia. But when I look up from my book in Borders, I’m just in Borders.”

Yet sometimes “just” Borders is what customers want. As bookstore customer Lisa Cohen notes, “I think it is very important to support local businesses of all types, including bookstores. The reality for a lot of people, though, is that when they need a particular title, especially… right away, they are… more likely to go to a Borders or a Barnes & Noble, because those stores are more likely to carry what they are looking for. Any bookstore can order a title, but why wait when you can get it today?”

For others, customer service is a deciding factor in choosing a bookstore. Says Athens resident Matt Zimmerman, “I prefer the chain stores like Barnes & Noble. They are clean, well-stocked, have a great selection, and the staff seems to be a bit friendlier than the smaller, independent bookstores’.”

Yet Goode says what differentiates Book Peddlers from the chains is “customer service. The big companies have forgotten what customer service is… I think people still like to go to a place where people know who you are when you come in; they greet you, or they remember you and they know what you like to read. You’re never going to get that at a chain.”

In The Shadow

Located in the same shopping center, Book Peddlers is closest to Borders, under construction between Buffalo’s Café and Video Update. Book Peddlers is a family-owned business which opened the Beechwood store in 1989 and operates a second store in Commerce. The company’s home office is in Anderson, SC, where their original store was “put out of business” two years ago by Books-A-Million, according to manager Lara Goode. Faced with the prospect of Borders’ competition, Book Peddlers decided to amend their lease at Beechwood, which had stipulated that no other book seller could rent in the shopping center. Such stipulations are common among specialty stores, says Goode. “The price to keep a really good renter is that you [the landlord] don’t let other people come in that sell the same thing they do.”

At one time Borders was considering the space across Alps Road left vacant by Winn Dixie, according to Goode. But Borders approached Colonial Properties, which owns and manages Beechwood, and Book Peddlers, and ultimately the terms of Book Peddlers’ lease were renegotiated. “It was the hardest decision we ever made to let them into this shopping center, but… we just thought it would be much better… to have them right at our doorstep than across the street,” says Goode. Borders would have entered the market somewhere, so Book Peddlers reasoned that having them in Beechwood would be less damaging than contending with them in another location, says Goode.

Goode revealed that in renegotiating Book Peddlers’ lease, “a deal was made, but I was not let in on that part of it, but it must have been good. It must have been a very good deal for us to let them come in.”

Patricia Oliffe, Colonial Properties property manager at Beechwood, says, “I’m sure there was a monetary incentive, but I don’t know what it was. That would be between… the owner and our corporate office.”

Hazel Dennis, leasing consultant with Colonial Properties, acknowledged that Borders is a desirable tenant and that it is to their benefit to have them in Beechwood. However, she declined to comment further on the negotiations with Book Peddlers, saying it is their corporate policy not to divulge the terms of tenants’ leases. She did offer that “Borders came into the center with the full support of Book Peddlers.”

Book Peddlers co-owner Chris Eaton did not return telephone calls regarding Borders.
For their part, Borders says they are looking forward to serving the Athens community. Says spokesperson Smith, “I think it will be good for Borders and Athens customers and all parties concerned.”

Melissa Tufts is among those who would disagree. “Huge corporately-owned bookstores are motivated by profit. After local taxes, some utility bills and a handful of employees are paid, the profits leave the community and go into the coffers in New York or Michigan or wherever and into the pockets of shareholders across the nation. This might be a good model for profit, but it is not a good model for a sustainable, responsive local economy.”

Lastly, the chains’ influence on what America is reading is also cause for concern.

You Will Read This

As Goode says, “Bestsellers are now determined by Books-A-Million, Barnes & Noble, and Borders. Whatever they’re pre-buying… to have on their shelves… is what’s the bestseller, not what people are buying. So we… go by what people are asking for.”

“Chains are based on a formula, and they’re the same all over the country; they have this certain list of books that they all order. I hand-pick every single book that’s in that store,” says Blue Moon’s Barnes.

Says Tony Arnold about the Old Black Dog, in comparing it to chain bookstores, “It wasn’t a situation where they were receiving boxes of stuff that some corporate suit picked out and said that they would carry.”

Tufts remarks, “…It galls me that marketing mavens and investors’ concerns over the stock market are determining what we read.”

From the Borders August press release: “The new Borders will feature a vast selection of over 150,000… titles. Just 50 percent of the Borders title base is common to all stores. The other half is customized to each location… Selection is custom-tailored to reflect regional and local interests, demographics and customer profiles.”

Athens soon will have the best of both worlds. How long the co-existence will last remains to be seen.