Battle of the Bookstores
As Borders joins the bookselling fray in west Knoxville, the competition for customers heats up.
By Tracy Jones
SEPTEMBER 29, 1997: It's a sunny football-free Saturday in late September. At the west Knoxville Barnes & Noble, customers are standing three or four deep at the counter of the in-store cafe; others are sprawled in the oversized armchairs with books and magazines. Up Kingston Pike a little, at the home of the future Borders Books and Music, employees unpack boxes of books and CDs, accompanied by the whine of saws and the thunk of hammers as the construction crew readies the building. Further west, at Books-A-Million, regulars stop to peruse the bestseller displays and bargain tables as they pick up their out-of-town newspapers. In the Davis-Kidd parking lot a mile down the road, parents and kids pile into minivans as the store's staff cleans up from the regular Saturday children's activity and starts hauling out tables for a local author book-signing later that afternoon.
In a year when the nation's two largest superstore chains, Barnes & Noble and Borders, have both decided to add Knoxville to their market share, bookworms can be forgiven a little heady excitement. Never before has our city had so many large and well-stocked bookstores so willing and eager to cater to our needs. But is the hometown crowd of literary aficionados large (and mobile) enough to support four bookstores crammed into one three-mile stretch of West Knoxville?
"I think it terrifies everybody who's already here," confesses Brenda Young, manager of Books-A-Million, which has been open at the Walker Springs shopping center since 1990. "I know Knoxville is a heavy reading community, so I hope we can all succeed."
What's surprising is not that so many bookstores are fighting for prominence in this market, but that this moment hasn't come sooner. Knoxville is a little late to a trend that's been the talk of book-selling for almost a decade. Since 1990, the country's four largest book chains have opened more than 700 stores. When Borders opens its store here in late September, Knoxville will be host to the three largest superstore chains: Barnes & Noble, which has 440 stores, Borders, which has 180, and Books-A-Million, which has 93 (only Crown, the fourth superstore, is not here). The chains' dominance extends to most smaller stores in Knoxville as well, since B. Dalton's, which has stores at both of the Knoxville malls, is owned by Barnes & Noble, which also owns Bookstar and Bookstop stores across the country. Waldenbooks, with a couple of area locations, is owned by Borders, and Bookland, which has small stores around the area, is a subsidiary of Books-A-Million. Although the chains occasionally close smaller stores when they open in a market (just as Barnes & Noble closed its Bookstar here), none has ever abandoned a market after opening a superstore there.
Such expansion has not been without consequences. As the chains have added locations, hundreds of independent booksellers around the country have shuttered their doors. These have included small stores like Knoxville's Apple Tree, What the Dickens?, and Printer's Mark, but also such larger independents as Atlanta's four-store Oxford Books and the Raleigh-based multi-store Intimate Bookshop. The designation "independent bookstore" once meant a single store controlled by a local proprietor, but the term has since expanded to include any bookstore that is privately held. It's a term that applies to the four-store bookseller Davis-Kidd, itself recently sold to the owners of Joseph-Beth, another independent bookstore in the Midwest. The new owner, Neil Van Uum, has vowed to "hit the ground running" in regard to competition from the chains. He and other independent booksellers, including Davis-Kidd founders Thelma Kidd and Karen Davis, are committed to educating people about what they stand to lose in the way of diversity and quality if the superstore chains drive the independents out of business.
The book superstores say that isn't their goal. Although all acknowledge the tough competition in the Knoxville market, they say there's no real battle to be had: Their business models aren't based on the prospect of someone else's failure.
"We already know what to expect in the way of sales volume. It's not as high as it might be if we were the only store in town, but it's certainly enough to support our store," says Brandon Jaynes, general manager of the soon-to-be-opened Borders. "We don't open stores randomly or haphazardly, nor do we open stores in a market just to be there. "
He reminds people that there are other factors involved in a store's success. "Bookstores aren't always competing directly with one another. It's much more complicated than that. We also face competition from the other ways people decide to spend their money. Will they go to a ball game, or to the park, or to a bookstore?" In this new retail space, Jaynes says, Borders will be the first business open in a brand-new shopping center that will also house an Old Navy clothing retailer and probably a large supermarket. The shopping center, across from the recently renovated West Town Mall, is being built on the site of the former Deane Hill golf course. Jaynes says he thinks Borders will benefit from spill-over traffic from the mall and other businesses as well as from the crowds pouring in and out of the new nine-screen cinema opening at West Town.
Although the Birmingham-based Books-A-Million has been opening stores in small Southern cities for about eight or nine years, Barnes & Noble and Borders have moved into these markets only in the past few years. Across the country, the two largest chains have started showing up in markets together at about the same time. Jaynes says this is, if not coincidence, at least not a conscious strategy on the part of Borders.
"I can tell you that we don't follow competitors around, but a lot of us use the same demographic data, so we're led to many of the same markets. There are only a certain number of spaces for a store like this, so I'm sure that we compete for some of the same spaces sometimes," Jaynes says. "A year ago, Knoxville's demographics probably looked pretty good, but there wasn't a space."
Stressing again that Borders has not come to Knoxville to put anyone else out of business, Jaynes says, "We're not necessarily splitting the market up so much that it kills anybody."
Much to her own surprise, Barnes & Noble's community relations coordinator, Angie Vicars, has begun to believe that as well.
"Once upon a time I think I would have said yes, there are too many bookstores," Vicars says. "But I don't necessarily think so. Of course we're a little nervous [about Borders] because it's another big bookstore, a chain that's similar to Barnes & Noble, and also because they're going to be close. We know it's going to make some difference. But people in Knoxville buy lots of books." She cites a signing she held for literary author Connie May Fowler and her novel Before Women Had Wings. "I sold 200 copies of that book. That to me spoke volumes about how much people around here read. Knoxville is really very literary, for a city of its size, especially."
Vicars is also encouraged by sales at the Barnes & Noble, which she says have been much higher than anyone predicted. "Sales at this store have been incredible. It was definitely the right time to open here. As soon as we opened, we became this sales district's most successful store."
What's odd about that is that in many ways, Barnes & Noble is simply Bookstar in a bigger space. A huge percentage of Barnes & Noble's inventory was simply moved from Bookstar when that store closed in May.
"A lot of sections enlarged," Vicars says of the move. "Particularly the children's section and the bargain section at the front. We added sitting areas and the cafe. These are really welcome additions, according to our customers. Let's face it, the European literary salons forever popularized the idea of sitting and drinking and reading."
She says that as Barnes & Noble, the chain is attracting people who never ventured into Bookstar. "Everybody has heard of us, because the chain is so well known. I don't think I even realized how well known it was. Lots of people who never came to Bookstar come to Barnes & Noble because they've shopped the stores in other cities." She says the chain's pairing with Starbucks in the stores' cafes has been a phenomenal success. "Starbucks is also very well known, even in markets like Knoxville that have never had a Starbucks before."
This juxtaposition of books with brand names makes former bookstore owner Brian Miller very uncomfortable. Miller owned the Printer's Mark Bookstore, first in an off-campus location, then on Market Square. His store carried new and used books, although his new titles were mostly alternative and small press titles not carried by the chains. He closed in 1995, he says, after simply becoming "burned out."
He believes the superstores have succeeded by appealing to our vanity and our images of ourselves. "They play to a lot of our ideas about what it means to be an educated person," says Miller. He says both Barnes & Noble and Borders are designed to make you feel richer, more cultured, and better read as soon as you walk in the door.
"It's sad when our image of ourselves can be so successfully marketed back to ourselves that whole bookstore chains can rise up to meet it," Miller says.
It's true that the images of the two largest chains are carefully marketed and carefully calculated. Barnes & Nobles' press material grandly states that the company "is widely regarded as being responsible for the resurging American interest in books and the pursuit of intellectual development." To cement its high-brow status, it has allied itself with the online version of the venerable New York Times Book Review, having reached an agreement with the paper that allows online readers to order books mentioned in the review directly from Barnes & Noble's Web site. In contrast, Borders appeals to a slightly younger, more socially liberal demographic. It underwrites a portion of the hip and sometimes controversial Internet magazine Salon (www.salonmag.com) and is also a generous contributor to National Public Radio. The corporation has, in the past, also given money to the National Endowment for the Arts as a way of stressing its commitment to arts and literature.
Books-A-Million, once the dominant chain in the South, may suffer somewhat from its lack of such a deliberately created identity. When the store first opened, it had the feel of a warehouse, something general manager Brenda Young says she's working to change. Young, who took over the store a year ago, says, "I'm trying to make it into a more comfortable, relaxed atmosphere." She's also trying to change the impression that it's a discount bookstore. The store's once-omnipresent remainder tables have been moved around and the books there are newer, less battered releases. At the same time, she says, they're not trying to be another Barnes & Noble. That store, Young says, with its heavy fixtures and nice woodwork, "tells you right away it's a rich kind of environment. We're trying to portray an image that says everybody's welcome. We're not trying to be anybody spectacular. We appeal to everybody from every walk of life."
The store's more populist, laid-back nature appeals to many, she says. "We see the same people almost everyday, especially in the cafe." She says the changes she's made have apparently countered most of the effects of Barnes & Noble's opening. "We're doing better than we did last year." Still, she's concerned about the hit Borders could cause.
What scares Young almost as much as Borders, she says, is that the new Best Buys, across from Davis-Kidd on Peters Road, will also be carrying books. "They're going to be discounting deeply."
"Borders is hurt by those other outlets as well," says Borders' manager Jaynes. "Sam's Club, Wal-Mart, Kmart still, to some extent. We're hurt the same way when a Sam's Club or another price club comes in and sells all their hardcover books at 40 percent off, because they don't care if they lose money. They just want to draw people into their stores. They sell books so far below the market that it's difficult then for our customers to come in and understand the value of the books. They're killing our industry."
His concerns seem valid. According to the book trade journal Publishers Weekly, 55 percent of all books are bought in places other than bookstores. This includes drugstores, gift shops, supermarkets, and specialty stores, but also deep discounters like Sam's and Best Buys. Of those books that are bought in bookstores, 26 percent are bought in chain stores and 18 percent are purchased at independent booksellers. As recently as 1991, though, 32 percent of all books were purchased in independent bookstores, with chain stores having a much lower percentage of the market. For chain bookstores to complain now about ruthless business practices strikes Miller as hollow.
It's not just that these chains seem to follow each other into markets, he says. "They find a market that has a really strong independent bookstore, then they move in." In Tennessee, that independent would be Davis-Kidd.
"First of all, we're not closing. Somehow that rumor has been spread, but it's not true. We have no plans to change at all," says Judie Luna, community relations coordinator for Davis-Kidd.
Except, of course, for a widely publicized change in ownership. Davis-Kidd, which opened in Knoxville in 1985, was recently sold to Neil and Mary Beth Van Uum, owners of Joseph-Beth Booksellers in Lexington and Cincinnati.
Founders Kidd and Davis were Van Uum's mentors in the business, and he has always said he modeled his stores after Davis-Kidd (note the hyphenated name). "There's always been a very close relationship between the two stores," says Luna.
Although both sets of owners have declined to reveal the financial particulars of the sale, expected to finalize around Oct. 1, industry publications say this makes Joseph-Beth one of the four or five largest independent booksellers in the country, and by far the largest in the South. Although Davis-Kidd's corporate offices will move from Nashville to Joseph-Beth's corporate headquarters in Cincinnati, the name will stay the same, because of the strong loyalty many customers have to the store.
"In Nashville, where the store was founded, Thelma and Karen have a very loyal affectionate following. Here, people feel strongly about the store," Luna says. She wants to reassure customers that "we will not be decreasing the number of [in-store] events or our involvement with the community."
In an interview with the Lexington Herald-Leader, Neil Van Uum said his purchase was "a win for the good guys," because the store could have easily been purchased by a chain. Although the issue of chain stores versus independent stores is one that concerns booksellers and industry insiders, Luna says it's one that doesn't seem to spill over to the general public.
"Honestly, I don't have the sense that most people know the difference. It's the responsibility of the independents, really, to make the shopping experience better and to be what the customer wants. That's outstanding customer service, information, entertainment, and a pleasant experience, and really standing behind what you say you're going to do.
"Of course we're apprehensive," she says of Borders' opening, "especially for the initial effect. Fortunately what we know from the history of what's happened in the other Davis-Kidd markets is that you experience some drop in your sales, but you can come back. We're a little bit later than the other Davis-Kidd stores [in Memphis and Nashville], facing this competition."
Although the bookstore chains were once granted preferential pricing by publishers, that was halted after the American Booksellers Association and several independent booksellers joined a lawsuit against six of the largest publishers. All settled out of court. The main advantage the chains have now is the money they receive in the way of co-op advertising, funds paid by the publishers to display certain books in prominent places. Jaynes, though, says the role of such co-op money is often overstated.
"Co-op advertising does not mean that every display in the store is bought and paid for by a publisher," says Jaynes. As a manager, he says, he has a lot of leeway in deciding where such displays will go.
Deep pockets are another obvious advantage of the chains. "The thing about chains is that they have lots of money to pour into location, space, staff, and customer service of all sorts," says Barnes & Noble's Vicars. "It's also true that if a store is a good store in a good location, people will continue to shop there."
Borders, for its part, insists that it has unfairly been classified as a mammoth chain. "Are Borders big stores? Yes. Are we supported by a large company? Yes. But that large company offers a lot of opportunity for people. I wouldn't still be in book-selling if I worked for an independent," says Jaynes, who managed a branch of the Intimate Bookshop in Raleigh. "Borders started out as an independent bookstore, went to a regional set of stores, when the Borders brothers decided they liked their concept enough to bring it to the rest of the country, and suddenly, it becomes, quote unquote, part of a superstore chain."
Borders' claim to independent roots is legitimate, says Luna. It's no secret that Davis-Kidd itself was modeled after Borders, which was then just one independent bookstore in Ann Arbor, Michigan. "[Karen Davis and Thelma Kidd] were in graduate school together, in social work, at the University of Michigan, and there was this fabulous bookstore there, which was Borders. That became their dream, to open a bookstore like Borders. At that time, when they opened their first store in Nashville in 1980, Tennessee didn't have anything like that. It was an instant success."
Sandy Hodge, who owned Apple Tree Books in Knoxville from 1980 to 1994, is another fan of the original Borders. "I was really impressed with the original Borders store in Ann Arbor," Hodge says, citing their deep selection and incredible customer service. "How that carries over into 160-plus stores, I don't know."
Hodge, who still keeps up with the book-selling trade, says the homogenization, the sameness of the superstore chains, as well as their corporate sensibility, are a real threat to the role of bookstores and books in our culture.
"Superstores have to answer to boards of directors, to stockholders," she says. "They're driven by something other than providing you with the diversity you want. They want to provide diversity as long as it enhances their bottom line. If people have never experienced going into an independent and seeing the diversity there, they don't know. It's sort of like an endangered species. You don't really know what you stand to lose."
One thing that is definitely lost, both Hodge and Miller say, is the ability of booksellers to nurture and grow a title through their own enthusiasm.
"Someone making $5.75 an hour at what's really a very stressful job just doesn't have the time to do that," says Miller. Hodge adds that even if a staff member in a large store is enthusiastic about a book, "Sometimes you take [that person's] ability to act helpfully out of their hands." Hodge says if the staff doesn't have the time to wander around a store with customers, helping them figure out what they need and how to find it, "then you lose that creative aspect of book-selling. That's one of the things I see as a problem with the chains. They don't do good hands-on selling."
Jaynes says this is a popular misconception. "I'll put our service up against anybody's," he says. "Granted, if we could get a 20- to 30-year career bookseller and be able to pay that person enough, we'd love that. Instead, because this is retail, and retail is a traditionally lower-wage job, we do have to hire people who are coming into the workforce for the first time or who are just out of college. We do try to hire people with vast knowledge, but they're in a young store. We have a great training program that can get them there with that knowledge much faster, but it's not something you learn overnight.
"But would I put my best eight [staffers] against Davis-Kidd's best eight?" he continues. "Absolutely. Even though a bookstore is a busy place at times, we've never set a store up to indicate that we would do anything except spend time helping people find books. Know that when you come here, you'll always get helpful and courteous service and we hope, too, that you'll get that unique service where [a member of our staff] can recommend something."
But, says Miller, such service has always been routine in the best independents. "The best booksellers had a missionary quality. They just loved books. They took risks to push the authors they loved."
"Independent bookstores are where bestsellers are created," says Hodge. She points out that almost all of publishing's biggest success stories have come from independent bookstores. Runaway bestsellers like Snow Falling on Cedar Mountain, The Joy Luck Club, Angela's Ashes, Midnight in the Garden of Good and Evil, and Cold Mountain were hand-sold by staff members at independents who simply loved the books. Each of these titles climbed the New York Times bestseller list through word of mouth. Although bestsellers are still created on this level, once a book arrives on the Times' list, the deep discounts the chains offer mean the independent is now hurt by the book's appearance there. As a result, some bookstores have suggested refusing to report their sales to the New York Times.
"It's one of those things where you almost don't want to put the information down in a form the chains can use," Hodge says. "Why give them a hand?"
If the superstores are allowed to grow unchecked, Hodge continues, it will definitely have an effect on the culture. "If the community allows every Mom-and-Pop store to disappear, what you're left with is Wal-Mart. You no longer have the McClellans, the Naples, the Davis-Kidds. Every time you allow one of those businesses to close, you've allowed the mainstream to say what will be sold."
"We've never been a bestseller bookstore," says Davis-Kidd's Luna. "We carry them, but people come here for books that the other stores don't carry. We might just have one copy, but that's a trade-off we make. We have that broad range of selection." Mostly, she says, "We pride ourselves on being booksellers who like books and know books and read books."
So, however, do Borders and Barnes & Noble. "Borders buys as deep and wide as any retailer I know, almost to our detriment," says Jaynes. Noting that the independents often do more special ordering than other stores, he says, "We'll special order, but we probably have it on the shelves."
But if the independent stores in general, and Davis-Kidd in particular, no longer have the advantage of being the only bookstore in town to carry some obscure title in cultural criticism or some limited edition art book, Hodge says the size and autonomy of independents give them the much-needed ability to respond quickly to the needs of the community and the market.
Borders and Barnes & Noble, for example, buy advertising and arrange book-signings based on directives and decisions made in the corporate offices.
"The layers of management will stifle the decisions that make for a really good store," says Hodge. "They can't react quickly. That's frustrating for the people who work there who want to make creative decisions."
Book-signings, for example, are one area where Davis-Kidd has traditionally outdone the chains, having brought authors like Pat Conroy, Patricia Cornwell, and Anne Rice to town. This fall will bring such noted writers Larry Brown, Clyde Edgerton, Ann Patchett, and Rebecca Wells. Because the larger chains can sponsor such authors at only a limited number of stores, both Borders' Jaynes and Barnes & Noble's Vicars concede that Davis-Kidd will probably continue to have more such events.
"Getting authors to stores is really important to us," says Jaynes. "But we have to compete in the market with everybody else and that means that each Borders gets much fewer than the independents."
"I wanted Anne Rice," says Vicars. "I wanted Patricia Cornwell. But we're a small fish in a really big pond. In the past, Barnes & Noble hasn't considered Knoxville a market for major authors on tour. They are looking at increasing the number of authors they direct here, though."
The best author signings and events, says Hodge, "bring people together." She says she doesn't see that same sense of community spirit, of welcoming a community into the store, that an independent bookseller like Davis-Kidd can provide.
"There's this feeling that you have of community purpose," says Hodge of her experiences owning a small bookstore. "It's something bigger than you are. You provide something for people who then give something back to you. It's a symbiotic relationship."
Although the chains, particularly the two largest, like to bill themselves as community centers, Hodge says, "I've been in enough of them to know that's just not true. Managers can subtly make changes [to further that goal] but it isn't something that happens with a lot of continuity."
For one thing, both Hodge and Miller say, being a part of a real, working community is about more than just providing entertainment. It's also about reaching out as a resource for information and knowledge.
"We all say we love community, whether or not we want to participate in it. I wouldn't open a bookstore and call it the Bookstore for Misanthropes," says Miller. But that doesn't mean, he says, that a bookstore can become a vital community center simply by declaring itself one. Especially, he says, since this community the chains are talking about is centered in one tiny spot of West Knoxville.
"I'm sure they've done their demographics," says Miller. "But I think they've just written off the east and north areas as a bunch of rubes who don't read." This is a mistake, he says, since he finds some of Knoxville's most vibrant cultural and intellectual life in areas outside West Knoxville.
Then why have all the bookstores settled out west? "That has to do with the developers, not with the retailers," says Jaynes. "It's where the new shopping areas are being built."
Vicars agrees. "A large chain is looking for the area that is most consumer-oriented. That's West Knoxville at the moment. Also, I think Davis-Kidd really started that trend of looking for a west Knoxville location."
That move was not without its own bit of controversy, says Luna. When Davis-Kidd moved from its UT campus location to Cedar Bluff in 1990, "People were very upset with us. It was really interesting, their reactions. Parking, though, was the unsolvable problem on Cumberland. And on football game days, we had to practically close the store, because no one could come down there."
The move was ultimately a beneficial one, she says. Attendance at children's events in the store doubled instantly, for example. She says she understands, though, why seven years later people still talk as though the store moved yesterday: "We loved that store." Although Davis-Kidd Knoxville, by far the smallest of the four Davis-Kidd stores, has no immediate plans for physical expansion, she says she feels the pressure of having competitors so close.
"They say they only expand the market, but you wonder if there isn't a limit to the market to the point where everybody suffers a decline in market share."
Although Hodge has harbored her own feelings of doom and gloom on that subject, she says she ultimately sees a hopeful future for smaller bookstores. "I think if you could jump forward in time and see that all the independents had disappeared, I think you would see them pop up again. People would realize the loss."
In fact, she says, "A week doesn't go by that I don't run into someone who says how much they miss Apple Tree and its presence in the [Bearden] neighborhood." It's very hard, she says, to create that feeling in a chain.
"It's what they strive for when they stick a coffee shop in, but it's not the same thing."
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