Bookstore Battles Binding Chains, With Discounted Prices And Additional Merchandise, Challenge Smaller Retailers For A Share Of $10.2 Billion Market

Sunshine brushes the shoulders of the bespectacled man who’s lost in the latest Atlantic Monthly. He slouches a bit in the dark leather chair, shirt sleeves rolled up, elbows resting on its arms as he thumbs page after page.

It’s another afternoon at Denver’s 25-year-old Tattered Cover bookstore, a four-story warren of floor-to-ceiling bookcases and reading nooks furnished in eclectic style - a wing chair, an overstuffed couch decorated with a crocheted doily, a gold leather easy chair and ottoman. Next to the magazine section is a tiny cafe where patrons sip cappuccino, chat quietly and read.

“It’s got every book you can possibly look for,” said Frank S. Russo, of Denver. “I just feel at home here.”

Three miles away is the very different atmosphere of the new Barnes & Noble superstore, where other book lovers wander the wide, neatly aligned aisles illuminated by modern, overhead lighting.

Some peruse the books, many offered at discount, while sitting on chairs and other furniture, or drinking Starbucks coffee next door. Others slip into the adjoining compact disc and computer software shops.

These stores represent the two sides of a war being waged nationwide between long-established independent booksellers and the superstore chains that are muscling into markets across the country.

The rapidly-expanding superstores have hurt many of the smaller booksellers as the competition intensified during the past three years. The American Booksellers Association reports nearly 100 independents closed between July 1993 and this past December.

The independents are “having to remake themselves in the face of competition,” said Bernard Rath, executive director of the ABA. “It’s just very, very difficult. The market is flexible to some degree, but it’s not infinite.”

Industry retail sales inched up .6 percent in fiscal year 1995, which ended in January, while sales for the four largest corporately-owned bookstores increased 17.4 percent, according to the trade publication Bookselling This Week.

Like other retail segments invaded by superstores, the competition ultimately will result in more consolidation, Rath predicted. But “to the degree independent bookstores can stay out of the line of fire, obviously they’ll have better success,” he said.

Twenty years ago, Americans usually bought books at cluttered bookstores tucked in corners, small shops and malls in their neighborhoods.

Today, the superstores average 10,000 square feet to 60,000 square feet, each carrying at least 100,000 titles, many at a discount. Some also have music and videos, with electronic kiosks where products can be previewed.

The two largest chains are Barnes & Noble, with about 358 superstores in 45 states and about 22,000 full- and part-time employees; and Borders, which has 124 superstores and more than 17,000 full- and part-time employees.

The New York-based Barnes & Noble also operates mall bookstores under the names B. Dalton Bookseller, Doubleday Book Shops and Scribner’s Bookstores; a mail order business and a publishing arm that turns out private-label books.

The Ann Arbor, Mich.-based Borders also operates mall stores under the name WaldenBook Co. Inc., and music stores under Planet Music Inc. Co.

The big chains say they offer an alternative, a sort of cultural haven where people can read leisurely, socialize, attend seminars or concerts and participate in book readings - sort of a public library with a cash register. Because of their size, they are able to order books from publishers at a discount that the independents often cannot obtain.

Critics believe the superstores are impersonal, cut corners on staff expertise and personalized service and offer a narrower range of titles.

But Stephen Riggio, Barnes & Noble executive vice president for merchandising, insists his chain is not so different from the independents. He contends that Tattered Cover, which is privately owned with two stores, could be considered a chain.

“We built our business from a single store,” he said. “We have been more innovative in bookselling than any bookseller in history. We’ve introduced selling, marketing and expanding that book market that nobody before had ever contemplated. It’s taken 30 years to do it.”

At Borders, marketing vice president Marilyn Slankard said, “We do compete, but we believe there is room in the market for small stores and large stores and that customers often like to have a choice and like to visit both.”

To counter the competition, many independents have expanded into book-signings, seminars and reading groups. Some have focused on specialties, such as bargain corners, and rare or used books. Others have added coffee bars.

In Denver, Tattered Cover’s competition has intensified during the past two years to include six Barnes & Noble stores and four Media Play stores, which offer books, videos and music. Others are in the planning stages.

With a 50,000-square-foot store offering 155,000 titles in stock, Tattered Cover was in fighting shape, but it opened a 7,500-square-foot downtown store that had been on the drawing board for four years, and added a coffee bar at the main store.

“When you have that much square footage in one type of retail business in a community the size of Denver and increase it that much that fast, the existing retailers are going to feel the impact. We did,” said Tattered Cover owner Joyce Meskis.

Meskis declined to release sales figures, but said she has not laid off any of the company’s 422 employees. “We have been fortunate to stand steady,” she said.

In Clayton, Mo., the 53,000-square-foot, 26-year-old Library, Ltd. is competing with four superstores. One of its innovations has been theme rooms. For example, cookbooks are in a room decorated like a French bistro, and the children’s section is in a room depicting a castle surrounded by a moat in which goldfish swim, said Terry Mittelman, co-owner.

Sales have increased steadily in the past three years, she said, but declined to release specific figures. “I believe we can more than survive,” she said.

In New York, Shakespeare & Co., another well-respected bookstore, expanded into a three-store company and changed its marketing and promotions strategy. General Manager Felice Rose believes the company thrives because of its locations and its college-educated, bookwise staff, which she says can find just about any book on the sketchiest information.

“The main reason, the most important reason we are still here is because we are basically a bookstore,” she said. “We’re book people. We don’t know how to operate a cappuccino machine, but we really do know books.”