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Playing field still unlevel in the bookselling game


© St. Petersburg Times, published April 29, 2001

Dear Small Business Owner:

Dear Small Business Owner:

Thank you for agreeing to compete against me in this business contest.

Here are the rules.

You run one small bookstore. I run a big national chain.

You buy your books at a wholesale price. I get deeper discounts, cheaper shipping plus unpublicized incentives.

You get little if any advertising support. I get lots of promotional backing.

You must pay your bills quickly. I get more time.

You have to beg for loans from your banker. I can sell stock.

Ready? Let the games begin!

Who in his right mind would agree to a contest with such slanted rules?

But that's pretty much what small independent bookstores faced throughout a nasty decade of competing with the giant chains, Barnes & Noble Inc. and Borders Group Inc.

That's why the independent bookstores' share of the consumer book market fell from 33 percent in 1991 to just 15 percent in 2000.

That's why independent bookstores, which nationwide numbered more than 5,000 in the early '90s, have dwindled by almost half.

Small bookstores dropped like flies in the late '90s as big book chains expanded rapidly and promoted bestsellers at deep discounts. At the same time, Amazon.com and other online bookseller sites began offering aggressively priced books.

Desperate for a more level playing field, the American Booksellers Association, which represents about 3,000 stores, in 1998 sued Barnes & Noble and Borders. The ABA charged the national book chains extracted illegal discounts and promotional subsidies from publishers, putting smaller chains and stores at an unfair disadvantage.

Three years later, U.S. District Judge William H. Orrick suggested small bookstores were just a bunch of whiners. Can giant supermarket chains buy food from suppliers for less than the local Mom and Pop store? Yes. Can Ford and General Motors purchase auto parts for less than the local body shops? Yes.

So why can't big bookstore chains do the same thing?

Last month in San Francisco, Judge Orrick throttled the ABA suit by ruling the independents were not entitled to damages because they couldn't prove those big-chain deals with publishers cut into independents' profits.

This month, the ABA and 26 small bookstores settled the antitrust lawsuit against Barnes & Noble and Borders for $4.7-million.

The ABA spent heavily -- upward of $16-million, a whopping $5,333 per member store -- in legal fees. The settlement is just a fraction of its expenses.

Hardly a victory. Separately, Barnes & Noble and Borders call the settlement a "vindication."

South Tampa's Inkwood Books, the most feisty of Tampa Bay's independents, was the only Florida plaintiff among the 26 bookstores in the lawsuit. Owners Carla Jiminez and Leslie Reiner think the lawsuit shed enough light on unfair practices between big booksellers and publishers to improve the deals independents are cutting today.

"Absolutely, it was worth it," Reiner says. "Things have changed so much."

To each his own.

In his office in New York, Leonard Riggio, chairman of Barnes & Noble, the country's largest bookstore company, celebrated the legal outcome with a high-five to a company spokeswoman.

* * *

Let me confess to an age-old habit. It's tough to pass by an inviting bookstore without stopping. I even go out of my way to visit some when I travel.

Inside, independent bookstores often capture the feel of a city or region. Often the books they choose to sell are not driven solely by bestseller lists and say a lot about what's important to the area. Many small bookstores are housed in quirky buildings. And the people who work in them often make me feel I've been invited into their homes.

Tampa's Inkwood and St. Petersburg's Haslam's and Bayboro Books are among some local favorites. But there are others. And Sarasota is bookstore rich, too.

While traveling in San Francisco earlier this year, I made a point of stopping by the City Lights bookstore. Founded in 1953 by poet Lawrence Ferlinghetti and Peter D. Martin, City Lights boasts the noisiest, rambling staircase and can conjure up the ghosts of Beat writers such as Jack Kerouac.

Manhattan's Strand Bookstore on Broadway near Greenwich Village is another dusty gem, with its huge metal shelves stacked high with unusual selections.

This month, I ventured for the first time into Arizona's Tortuga Books in the tiny town of Tubac, south of Tucson. American Indian literature, nature guides on the remarkable area deserts and mountains, and Southwestern cuisine books reminded me I was close to the Mexican border.

None of that makes me some purist. Like most folks, I buy books at Barnes & Noble and Borders when the stores are handy. I surf Amazon and other book Web sites because, in many ways, Internet browsing is a far more efficient way to find fresh books and new authors.

Just never underestimate the sense of community in a devoted independent bookstore.

* * *

In the bookstore war, many independents died a few years ago. Among the area casualties: St. Petersburg's Samantha's; the Book Store at Jasmine, Pasco County's largest independent; Tampa's Hyde Park Book Store; and Ybor City's Three Birds Bookstore, among others.

Since then, Barnes & Noble and Borders have slowed their pace of expansion. Cutthroat price discounting on bestsellers has diminished. Independents have rallied around an online book service (www.BookSense.com) that helps them compete on the Internet and still feel local.

And the ABA lawsuit exposing favorable deals for big bookstore chains has educated independents and emboldened them to fight for their own discounts from publishers.

The Darwinian result? Those small bookstores still around are tougher and healthy. But not all are pleased with the outcome of the high-priced suit.

Bullying publishers for secret discounts? Encouraging them to concentrate on bestsellers? Choking small bookstores out of the market by clustering?

Neither Barnes & Noble nor Borders admitted to any of these practices charged in the suit. Nor did they agree to change their policies and terms with publishers.

Don't cry for the small independents, says Stephanie Oda, who publishes Subtext, a bi-weekly book business newsletter in Darien, Conn.

"The independents have shown themselves to be remarkably resilient in surviving the chain store massacre," Oda says.

Small bookstores may not go the way of neighborhood hardware and local drug stores. Not yet.

But within 15 minutes of where I sit in downtown St. Petersburg, I can choose to buy a popular book at four independents, a Barnes & Noble, a Borders, a Waldenbooks, a Target, a Wal-Mart, as well as Amazon.com and other online sites.

"There are still too many book outlets," Oda admits.

And there are just not that many books to be sold.

-- Robert Trigaux can be reached at trigaux@sptimes.com or (727) 893-8405.

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