The litter in littérateur. Ricky Opaterny on Books, Music, Art, and Sports

Vanishing New York collects some news on a shake-up in Manhattan bookstores: Biography Bookshop in the West Village, which you might know because it’s across the street from Magnolia, is moving. Left Bank Books, which has a wonderful selection of collectible and signed editions. Finally, Skyline Books in Chelsea is closing.

One reason why independently owned bookstores have a tough time competing with BN is that they have a higher cost of equity. In this lecture, Aswath Damodaran of NYU estimates the cost of equity for a New York indie bookstore to be around 14%, while it’s only 8% for BN. This analysis makes the manner in which Kepler’s raised money from 20+ investors in 2005 look smart. The investors provide the diversification that Kepler’s can’t get from the public market like BN does. If you want more reading on the subject, click here, though I recommend the watching the lecture over reading the linked chapter.

The Capitola Book Cafe is launching a membership program similar to the one used by Kepler’s.

The Book Cafe is instituting a membership program, in which they’re asking their customers to pay an annual fee in five levels from $25 to $250. Those fees will entitle them to a number of benefits — free food and drink, shopping sprees, tickets to events and other discounts — but they’re also needed to keep the Book Cafe in business.

Unfortunately, it looks like this membership program will, like Kepler’s, offer no accountability or provide donors—that’s what they are, not members—any insight into how the bookstore is using their contributions, which is a shame.

The San Francisco Chronicle recently ran a story about the recent success of Booksmith on Haight in San Francisco.Preveen Madan and Christin Evans acquired the store in 2007,

Evans said they think of their staff as “book concierges,” gently nudging browsing shoppers toward books they might not have considered. They group books in unusual categories on shelves. A recent favorite is “Long Dead Writers – Read Them Before You Meet Them.”

That’s something that most bookstores don’t do. And it’s not a bad thing if their edit or selection of books is strong. However, most stores depend on the books selling themselves, which, in the absence of such a selection, will never work.

A couple months ago, Inc. magazine published the second in a series of stories about the revival of Kepler’s Books in Menlo Park, CA. I responded with a blog post and a letter to the editor, which appears in the June issue of Inc. and is reprinted below.

It’s telling that Part Two of Bo Burlingham’s story about Kepler’s, a bookstore, doesn’t once mention a single author or book title [“The Plot Thickens,” March]. Burlingham also fails to include views from anyone outside of the store’s management team and its consultants. I couldn’t imagine him writing a similar story about a software company without mentioning an engineer or views from outside industry observers.

If Anne Banta and Clark Kepler want to revive the business, it’s essential to pay more attention to their primary product and how customers relate to it. Banta may know good business, but without knowing good books, her efforts will be futile.

Cody’s Books on Stockton Street in San Francisco will be closing on April 20, reports the San Francisco Chronicle.

The 22,000-square-foot store on Stockton Street, between Union Square and Market Street, will close on April 20. It will send 20 percent of its inventory to the last remaining Cody’s location, on Fourth Street in Berkeley.

Cody’s President Andrew Ross, who mortgaged his house to open the San Francisco store, said it has been losing $70,000 a month.

When Cody’s Telegraph location announced its impending closure last spring, Ross asserted than the San Francisco store was doing quite well, and on pace to be profitable. Obviously and sadly, that didn’t happen.

A few months ago, I posted about what was, at the time, an upcoming screening of the film Indies Under Fire sponsored by Kepler’s. Based on the film’s trailer, which I watched online, I wrote that it looked to be “another sentimental, corporate-bashing look at indie bookstores that refuses to do the hard work of pointing a critical eye at indies themselves and asking why the independent bookselling business has been stagnant and so incredibly slow to innovate or pioneer new business practices over the past few decades.” I recently received a comment from a reader who thought I might not have written that had I actually seen the film.

I did attend the screening, and though the film is slightly more nuanced than I had expected, its implied argument is that Borders and the corporate booksellers led to the demise of Printer’s Inc. in Palo Alto. I grew up down the street from Printer’s Inc., and must note that it wasn’t a particularly good bookstore. When compared to the other big indie bookstores in the Bay Area–Cody’s, Kepler’s, ACWLP, Book Passage, Green Apple, etc.–Printer’s rated very low in my book.

Although the sentimental view of the indie bookstore getting killed by the heartless, bland corporate bookseller certainly appeals to people’s emotions, it seems that indie bookstores are really responsible for their own survival. Berkeley’s Nydia MacGregor wrote a paper in which she argued that the presence of chain stores has little effect on the sales of independent bookstores in the same area as long as the local community is engaged and the independent store provides them with a unique identity. She writes:

Independent booksellers link consumers with an identity that connects to a more differentiated self-concept, that fits within a narrower social group. Given the complementary nature of the relationship between these two organizational forms and the differentiated resources that they demand, branch store openings will not negatively affect the baseline survival rates of independent stores, even when they enter into the same community.

In short, the relationship that Indies Under Fire suggests between Borders and Printer’s Inc. is flat out wrong. Printer’s Inc. killed itself.

The second part of Bo Burlingham’s three-part series on Kepler’s appears in the March issue of Inc. magazine. Burlingham recounts the struggles that Anne Banta, Clark Kepler, et al have had over the past year or so after the store reopened in October 2005. It seems that Banta has finally come to some conclusions that she should have reached a long time ago. She’s quoted, “I feel hopeful about how it’s going. But the idea of people from high tech coming in to save the day—it was so naive to think that we could. We have to find other people who know the industry–an advisory board or something. If we can tap into some industry experts, it would make a big difference.”

The only problem here is that the sort of industry experts she seeks out are people like Michael Hoynes, who recommend diversifying product lines, targeting the store to families, and other marketing nonsense that has nothing to do with books or how to reach people who care about books and are willing to spend money on them.

In September of 2005, I wrote a letter to the San Jose Mercury News criticizing the composition of Kepler’s board of directors and suggested that they include someone from the literary community on the board. They still have not done this. (You can read the letter reprinted below, if you click on the “more” link.)

Burlingham’s article definitely provides some hope that the store is on the right track and that Banta and Kepler have finally realized that the store can’t be everything to everyone—that it needs focus, and having focus inevitably means alienating some people. At one point in the article, Burlingham quotes Banta when she exclaims, “But I don’t know what we want [the store] to be!”

I obviously love the store quite a bit. I still buy most of my books there—about 100 a year. I claim at least some responsibility for the store’s revival, and yet I also understand that in order to reshape itself to survive, Kepler’s may, in fact, alienate me. I sure hope they don’t, that they beef up their literary fiction section, stop cutting back on periodicals, and find some way to finance doing so. If that means selling ridiculous games and diaries and DVDs and Christmas cards, then so be it. But I think they still need to figure out a) How are we going to make money? and b) What are we going to invest that money in? What is going to give us the greatest return? And what is going to be of long-term, literary value to our customers? This is a decision that you can only make with strong leadership and leaders who are interested in books and business. When I used to travel more and visit new bookstores on a regular basis, I had two tests for whether the store was good or not: 1. Did they stock all books by F. Scott Fitzgerald? (He died at 44, after all, and only has about a dozen books.) and 2. Do they have The Recognitions by William Gaddis. Fail both, and you’re out of the running. Those tests have not changed in years, and I don’t expect them to.

On a final note, the article mentions setting trackable benchmarks for the staff, which I completely agree with, but the question is this: Can a metrics-driven business model be compatible with an art form that is not. Seriously, if the literary business was entirely driven by sales, we would have only be able to choose a bunch of crappy best-selling novels by John Grisham, Michael Crichton, et al.

As Banta had come to realize, Kepler would have to learn an entirely different management style if the company were to be turned around and set up to last for another 50 years–the goal set by Méndez and the board. He would have to put managers in place, give them real responsibilities, and hold them accountable. He would have to commit to a plan with realistic projections, quantified goals, and specific benchmarks. Banta and her colleagues had already identified the key areas to concentrate on. They were the six imperatives that made up her “bubbles of focus.” The first bubble was the core: doing the things that defined Kepler’s mission of being the local area’s community and cultural destination. The second: sell more effectively to current customers. The third: expand and diversify the customer base. The fourth: expand and diversify the store’s product line. The fifth: develop an employee culture of empowerment with total customer focus and an understanding of person-to-person marketing. The sixth: reduce costs and improve efficiencies. Banta wanted the participants in the meetings to lay out all the ideas they had for addressing the imperatives. She then wanted them to decide on the three to five most promising ones in each area, estimate the costs and returns, assign responsibility, and settle on the measurements they would use to monitor progress.

While I was living in New York four years ago, I ran into a former Kepler’s employee, who recounted Clark Kepler’s ridiculous rules for his employees, which included not being allowed to sit down or read while on the job. Burlingham seems to suggest that these rules were actually legitimate.

As a manager, he was a one-man band. Every significant problem came to him. He wasn’t even willing to delegate responsibility for checking the suggestion box. On top of that, he had an elaborate set of written rules governing everything an employee might do. Aside from contributing nothing to the business, the rules sent exactly the wrong message to the staff: You are not empowered to think for yourself.

This, generally, seems like a poor way to manage a business, but, hey, what do I know? I’m just a writer. (more…)

Stacy Mitchell’s book, Big-Box Swindle, opens with an anecdote about the resurrection of Kepler’s in the fall of 2005, and in which this blog played an instrumental role. Her book, which is a well-researched diatribe against chain stores, received coverage in Business Week last week. I haven’t read the book yet, but judging by the review, it doesn’t seem like Mitchell’s research really offers anything new:

While chain stores were already a presence by World War I, changes to the federal tax code in 1954 turned them into tax shelters. Within three years, new shopping center construction had increased more than 500%; Wal-Mart, Target, Bradlees, Kor-vettes, and Caldor are among the retailers that soon appeared. These days, local governments lure the chains with generous subsidies and tax breaks, thinking the stores will bring jobs to town. Mitchell, building on her own and others’ research, counters that the boost “is nothing more than an illusion.” The stores do create hundreds of jobs, but eliminate just as many by forcing other businesses to downsize or close. The tax dollars they generate are offset by lost sales and property tax revenue from local business districts and shopping centers. A 2006 working paper by the Public Policy Institute of California examined several markets and found the opening of a Wal-Mart resulted in a drop in countywide retail earnings of 2.8%.

Coliseum Books in New York will be closing before the end of the year, according to the New York Times. I lived in New York when Coliseum reopened in 2004, and it was my third-favorite store in Manhattan behind Gotham Book Mart and St. Marks Bookshop.

It looks like Gotham Book Mart in New York is in trouble once again. This is my favorite store in the country, and I hope something can be done to keep the store open.

From the New York Times story today:

In the last six months, the owners of the building have moved to evict the store and its owner, Andreas Brown. Friends of Mr. Brown’s say the building’s owners were only trying to help Gotham get on its feet. They say that Mr. Brown, who hoped to buy the building eventually, fell behind on his $51,000 monthly rent, and owes at least $500,000 in rent, taxes, interest and other fees.

Whether he fell behind because he lost momentum during the difficult transition after the move from the old building or because — as some friends say — he devoted his money to his first love, buying more books, and to paying his employees rather than his rent, the Gotham is fighting for its life once again.
….
What is clear is that a judge has authorized a city marshal to seize hundreds of thousands of items worth, perhaps, millions of dollars; that the store is closed, though employees are still allowed inside; and that Mr. Brown, who is 73, is no longer living there.

Mr. Brown’s lawyer, Lawrence D. Bernfeld, said yesterday that the current owner of the building, listed in real estate records only as 16 East 46th Street Property L.L.C., was willing, for just a brief time, to entertain offers to sell the building at below-market price to a new owner who would continue renting to the Gotham. “Should such a contract go forward, enlightened capitalism will be at work,” Mr. Bernfeld said.

I spoke with Andreas in the spring of 2005 for a story and posted previously on this blog about my love for his store.

Kepler’s is sponsoring a screening of the film Indies Under Fire about the decline of independent bookstores in America. The screening will take place at 7:30 pm on September 30 at 700 Santa Cruz Avenue in Menlo Park.

If the film’s trailer is a good indication of its actual content, it looks like the documentary is yet another sentimental, corporate-bashing look at indie bookstores that refuses to do the hard work of pointing a critical eye at indies themselves and asking why the independent bookselling business has been stagnant and so incredibly slow to innovate or pioneer new business practices over the past few decades.

Japanese bookseller and publisher Yohan, Inc., has acquired Cody’s Books. Yohan is the largest distributor of English-language books in Japan. Cody’s, which closed its Telegraph Avenue store in July, has locations on Fourth Street in Berkeley and on Stockton in San Francisco.

The press release announcing the sale does not disclose the terms of the deal and is, generally, rather vague about Yohan’s interest in the Berkeley-based Cody’s:

Cody’s will retain both its Fourth Street store in Berkeley and its Union Square store in San Francisco, its extensive author appearance program, its school, library, and corporate book services, and its expert staff. Ross will remain president of Cody’s Books, and Leslie Berkler will become vice-president, focusing on store operations, as well as rapidly growing off-site programs including book fairs, schools, libraries, and corporate sales. Cody’s will operate as a wholly-owned subsidiary of Yohan.

Cody’s, founded by Fred and Pat Cody in 1956, is celebrating its 50th anniversary this year. Andy Ross acquired the business in 1977, and then opened a second Berkeley store in 1997 and a downtown San Francisco store in 2005. The flagship Telegraph Avenue store in Berkeley was closed earlier this year due to declining sales. Ross notes, “With Yohan’s support, Cody’s will continue to be both an essential voice in the community while exploring a number of growth opportunities around the corner and across the globe.”

Hiroshi Kagawa, CEO of Yohan, says, “I’ve loved Cody’s ever since I first visited the store in 1983.” Founded in 1953, Yohan is the largest distributor of English-language books and magazines in Japan. It owns 18 bookstores in Japan, including the art and design-focused Aoyama Book Center, as well as the publisher IBC Publishing. “It is our ultimate mission to promote culture and communications worldwide,” says Kagawa. Yohan also owns Berkeley’s Stone Bridge Press, run by Kagawa’s longtime friend and colleague Peter Goodman. “Hiroshi loves books,” says Goodman. “Yohan and Cody’s share a sensibility that venerates the written word.”

Kepler’s is selling books online for the first time since the store closed in August 2005. However, it appears that the store is using the same BookSense template that is used by many other independent bookstores to create a sort of token online presence. Why it took them a year to put up a site that is nearly identical to the one the store had before it closed is beyond me. One of the major problems with the BookSense sites is their lack of metadata, including reviews and reader comments.

Cody’s Books on Telegraph is closing today.

The Contra Costa Times summarizes and laments the state of independent bookstores in the Bay Area. In their article, a local writer, Linda Watanabe McFerrin, is quoted as saying, “A bookseller like Cody’s or Book Passage doesn’t just participate in the scene. They help create it. They are actually generating the literary culture. They’re not just serving it, and that’s very, very different.”

This, unfortunately, seems to me the exact opposite of what Kepler’s is doing these days with their market research, trying to find out what customers want so the store can be everything to everyone. The consequence, of course, is that they still have yet to establish a clear voice in the literary landscape. What does Kepler’s stand for–i.e. what kind of books does it stand for? I’ve been shopping there for a decade, and I have no idea.

Some out of town news:

Tattered Cover in Dever has moved to a refurbished theater.

In developments reminiscent of what happened with Kepler’s last year, Brazos Bookstore in Houston has been bought and will not close.

ACWLP in San Francisco will be closing as soon as the store can liquidate its inventory. The store’s owner, Neal Sofman, has posted the following message on the store’s website:

Dear Esteemed Customers and Friends,

We deeply regret to announce that we will be closing A Clean Well-Lighted Place for Books as soon as we can liquidate our inventory.

Beginning Friday, June 16th we will be selling our stock at 20% off regular price.

Our hours will change to 11am until 7 pm beginning Monday, June 19 th .

We thank you all for the wonderful support you have provided A Clean Well-Lighted Place. It has been our great pleasure to work with you and be part of the same community over the years.

Many will ask why this is happening. The reasons are many and complex. The simple answer is that the book buying market has moved on, either geographically or culturally.

Thank you for your many years of support. We had a great run. We will miss you.

Neal Sofman

Owner

The meeting on Thursday, June 8, will be at Trinity United Methodist Church, 2362 Bancroft Way, at 7 pm. We look forward to seeing you there.

As reported in the Oakland Tribune and elsewhere, the Berkeley City Council has approved a plan to revitalize Telegraph Avenue. This action seems to be largely in response to the impending closure of Cody’s.

However, David Lazarus expresses skepticism about the City Council’s plan in the San Francisco Chronicle. Lazarus suggests that the City Council is only working on a short-term fix, and he proposes the more radical idea of transforming the four-block stretch of Telegraph near UC Berkeley into a pedestrian mall.

Andy Ross has been in talking with investors interested in saving the store. If you are a qualified potential investor, please email me.

On June 8 at 7pm, there will be a community meeting in Berkeley to discuss the prospects of saving Cody’s. The meeting location is still to be determined. We will post any updates as they become available. Andy Ross will attend, and I encourage everyone to do the same.

Paul Collins asks this question in his Village Voice article, which is essentially a review of Laura J. Miller’s new book, Reluctant Capitalists: Bookselling and the Culture of Consumption.

Collins writes,

Today’s field, though, may not be the future’s. Superstores live and die by generous zoning, massive inventory, co-op money, and deep discounts. Zoning laws may stiffen, return policies change, or price controls curtail loss-leader strategies. All these possibilities, however unlikely, have precedents; indeed, it was the owner of Nantucket Bookworks who last month spearheaded a chain store ban in that island’s downtown. Ultimately, though, the greatest vulnerability of chains may be their muscle-bound nature. If print-on-demand technology, though still poky and faintly disreputable, ever achieves the availability and quality of traditional books, the need for overstock returns, remainders, and huge retail spaces may evaporate.

Tyler Cowen has an article in Slate that makes the case against independent bookstores. I, of course, disagree with him on multiple counts, but his argument is well worth reading. Cowen seems to write from the vantage point of someone who has little interest in small titles or publishing houses. I’m willing to bet that his assertion that “if you’re looking for Arabic poetry you have a better chance of finding it at Barnes & Noble than at your local community bookstore” isn’t based on personal experience with a niche interest.

What’s disturbing about the essay, though, is that Cowen blindly accepts the decreasing attention span of Americans.

It was easy to finish Tolstoy’s War and Peace when there were few other books around and it was hard to find them. Today, finishing it means forgoing many other options at our fingertips. As a result, we tend to consume ideas in smaller bits, a proposition that (in another context) economists labeled the “Alchian and Allen theorem.” Long, serious novels are less culturally central than they were 100 years ago. Blogs are on the rise, and most readers prefer the ones with the shorter posts. Our greater access to books also means that each book has less time to prove itself. A small percentage of the books published account for a large share of the profits, thus setting off a race to track reader demand.

Somehow, people still read War and Peace and Anna Karenina and even some long books published in the last 50 years: The Recognitions, Infinite Jest, and Gravity’s Rainbow to name a few. Perhaps, Mr. Cohen isn’t aware of this. Cohen seems all too willing to accept current trends; perhaps, it’s because he isn’t actually a reader because readers, serious readers, are defined by their willingness to question what is normally accepted, to stand in opposition to the zeitgeist and say, “Everyone thinks this is good, but it’s kind of bad” or the inverse.

Of course, Cohen is correct in his implication that if independent bookstores are reacting to the cultural climate rather than creating it, they will most certainly be doomed.

There is the possibility that Cohen actually has read Tolstoy and Pynchon and Foster Wallace, and he’s just making big generalizations for the sake of being provocative. If so, it’s a shame because writing, as anyone who’s ever read those authors knows, can express deep moral ambiguities and raise difficult questions that go unresolved. In other words, it can do so much more than Cohen demonstrates in his essay.