Bookstore news

Recent news about bookstores has been a mixed bag. Longtime readers of this newsletter know I’ve been on a death watch for Barnes and Noble for a couple years. We’ve recently worked out a direct arrangement with them and are trying to make a go of it, but they are also in an ever weakening position. Recently, it was announced they would be closing eight more stores in the coming year. I wouldn’t be surprised if their eBook business was sold off to Kobo and they get out of this losing business. EBook sales remain flat or down and have plateaued at 20% of all book sales. The vast majority of eBook sales are fiction titles.
While B&N is up and down, The Last Word in Charlotte, North Carolina went bankrupt this past week. While they sold mostly used books and media, they were on our list of independent customers. We’ve noticed a decided slowing in the payments coming from independents of late. Many are more than 90 days past due. We’ve recently sent another round of dunning emails, some going unanswered. I worry if I follow up I will discover a couple more bookstores exiting the business. This bears watching. In a strong economy, to still have business failures in this industry indicates there are structural changes afoot.
And here’s our culprit …. Amazon! We are all very familiar with their global online offerings. In fact, they are about one-third of our business and about half of the overall book trade (Barnes is 17% overall — the only other player over 10%). Amazon recently opened a brick and mortar bookstore in New York City near the site of a former Borders store (boy do I miss those!)

Trouble at Barnes and Noble

Our news regarding Barnes and Noble has been a mixed bag. First and foremost, the chain had a terrible year in 2017 and is taking some drastic actions this year. Those of you who have been with us for awhile know I’ve been on Barnes and Noble death watch for some time. We’ve just seen ToysRUs file for bankruptcy and plan to liquidate all of its stores. Barnes is similar in that it is also a 1990s-style big box store. They have announced plans to close some stores, reduce the number of employees in the stores, and only open smaller stores in the future. This sounds like the death spiral continues.
But, they remain the largest book chain by far, though they only do less than half of Amazon’s business. Still, we cannot ignore 17% of the marketplace. One in six books is sold through B&N!
At Sunbury Press, we have been losing money when dealing with the chain book trade since early 2017. We have noticed an uptick in returns and a slight decline in new orders. Meanwhile, our sales in other channels have grown thanks to direct sales to readers, direct sales to independent bookstores, and our growing online business. This downturn when dealing with the big chains tells me they are in trouble. We don’t want to be left hanging when they fold — like the dozens of publishers who went out of business when Borders closed and returned millions of dollars in unsold books. We are quietly switching our strategy with Barnes to deal directly with them, rather than through Ingram. Through the direct arrangement, Barnes agrees not to return books. We’ve also “rekindled” our eBook deal with them. Look for many of our books to be available again on the Nook. The main reason I am doing this is I believe this will be sold off — likely to Kobo or Apple and will give us entré onto those platforms in a big way.

On bookstores and book orders

Alas, another brick and mortar book chain has succumbed to the Amazon behemoth. Here’s the article from Publishers Weekly:
Appleton, Wisc.-based Book World Inc. has announced that it is closing all bookstores in its Book World chain that operates 45 outlets across the Midwest. In a letter to its business partners and vendors as well as in a release sent to media, Book World said that liquidation sales will begin on November 2 at all 45 locations. The sales will continue until all inventory — books, magazines, greeting cards, gifts, and other sidelines – is gone. The company expects that all stores will be closed by January 15.
In the letter to Book World’s business partners, senior v-p Mark Dupont said that while the chain had been able to weather the advent of e-books, in the past 12 months sales started plummeting and still continue to drop. Dupont attributed the downturn to the national consumer shift towards e-commerce and away from large department stores. This, Dupont wrote, “has triggered the loss of vital mall anchor stores and a downward spiral in customer counts, reducing sales to a level that will no longer sustain our business.”
“We didn’t anticipate being in this situation,” Dupont told PW, disclosing that the decision to liquidate the company was made about 10 days ago. “I thought I’d be at Book World until the day I retired.”
Book World stores are located throughout the Midwest, outside of the region’s most populated metropolitan areas, most of them either in small town business districts or in shopping malls. There are 20 stores in Wisconsin, eight in Illinois, seven in Michigan’s Upper Peninsula, five in Minnesota, three in Iowa, and one each in Missouri and in North Dakota. Dupont said a dozen employees in Book World’s corporate office will be laid off, as well as more than 300 booksellers across the 45 stores.
The first Book World store was founded in 1976 by William Streur in Rhinelander, Wisc.; Streur has always shied away from industry attention as he and his family built up the company over the years; the company declined to cooperate with a 2010 PW profile.
Du Pont, noting that Book World just opened a location in Jefferson City, Mo. said that some of the stores — especially those in downtown areas — are doing well, and expressed his hope that people interested in bookselling in communities about to lose their Book World outlet would open up their own bookstore, perhaps even in the same building. “Many of the stores are truly still healthy,” he wrote.
“We’re saddened to hear the news of a longstanding family business in our region closing and wish all of the employees best wishes with this transition,” wrote Carrie Obry, the executive director of the Midwest Independent Booksellers Association. While MIBA will be losing some members, Obry noted that “the real impact will be in the communities that have to do without a bookstore until someone opens a new one.”
Given the relatively small store count, we don’t expect this closing to have a major impact on publishers. However, it is indicative of the point we are at in this business. While the vast majority of books are still sold in print, the majority of books are sold online, through ecommerce.
At Sunbury Press, we continue to be very supportive of our local and regional booksellers, and urge our authors to select them for events over Barnes and Noble and Books-A-Million whenever possible.
We will continue to monitor our risk of returns from the book trade, as we continue to navigate these choppy waters. Next year will be our 15th in business, and we hope to continue for many many more years.
We have had a number of questions recently about ordering books for events. Bookstores can order from us directly at a 40% discount, or can order from Ingram. We would prefer a direct order — or that you handle the books for your events. This month, we are once again in receipt of a large number of copies returned from book events where the stores over-ordered. These boomerang books are deducted from your royalties and build up in our inventory, when you could have just picked them up and used them at your next event.  If you are doing a series of author events, please work with the bookstores to prevent returns. They are expensive for all parties involved.
And, for those of you ordering books, don’t forget to use the A50 coupon code when checking out. We’ve had to fix a number of orders this past month. Please email orders@sunburypress.com if you have any questions.

The Looming Collapse of Barnes and Noble


The Looming Collapse of Barnes and Noble
In recent weeks, I’ve been grousing about returns and their sudden increase at the end of last year. Now, I have a much better understanding of what happened. Barnes & Noble saw comparable store sales plummet over 9% in their stores last year — and experienced a subsequent 7.5% drop in revenue in the next quarter. Nook sales were down 25% in the same period. Not many retailers can take a hit like this and survive for long. Another bad year and the end is near.
We live in one of the most economically vibrant areas in the northeast, yet our Sears was being torn down last week — as was the KMart. HH Gregg was closing its doors, as were a number of other retailers. If anything is clear, brick and mortar retail is suffering — and Barnes and Noble, as great as their stores are, is no exception. (The chart above shows the declines have been ongoing for 4+years.)
Several years ago, not soon after we rebooted Sunbury Press in 2010, Borders Books — an author/independent – friendly chain went out of business. It took with it a number of small to medium-sized publishers who could not absorb the deluge of returns and lost revenue. Barnes is a much larger retailer than Borders ever was.  If they would suddenly close up shop, the effect on the publishing industry would be devastating to all but the strongest players.
At Sunbury Press, we have already started taking action to batten-down the hatches before this storm even hits.  We have greatly limited the number of new titles automatically receiving return privileges. Some of you have asked about this. At this point in time, it is essential we reduce our exposure to returns from a failing BN. At Sunbury Press, we believe our exposure is the equivalent to one year’s sales sitting in stores that could boomerang back. If, suddenly, several 18 wheelers showed up at the farm with hundreds of pallets of returned books, we’d be out of business – bankrupt.  Fortunately, this exposure drops over time, as we do not add to it.  This is our goal — to mitigate our risk.
Does this mean the book trade is failing?  No.  In fact, book sales overall increased last year.  Online sales are up and sales at independents are up. Here’s the problem with independents, though.  While we absolutely love to support independent bookstores, we can’t tell the distributors to only accept returns from them and not Barnes.  So, please tell your independents to order directly from us, and will accept returns.