The novel resurgence of independent bookstores

Defying the onslaught of the e-book revolution, many small bookshops see a rise in sales, aided by savvy business practices and the 'buy local' movement. 

Cover Story

Last October, when superstorm Sandy ripped through Connecticut, it flooded Bank Square Books in Mystic. Owner Annie Philbrick recalls walking inside to the smell of the ocean and a soaking wet carpet.

She and her staff had moved everything as high as they could before the storm, but water and paper are a disastrous combination. With no power to turn on pumps or fans, Ms. Philbrick was in danger of losing her stock of more than 30,000 books.

She put out an update on her Facebook page: We have to get these books out of here or we're going to lose them all. The volunteers started arriving. Philbrick's neighbors and customers helped the staff load 400 packing crates of books – enough to fill two Mayflower moving vans.

After the walls and floors had been repaired, more volunteers showed up to carry the books back inside the store. They loaded cards on spinner racks, dropped off cookies, and cleaned the windows and the floor. A PayPal Sandy Relief Fund raised $7,000 – enough for Philbrick to pay the movers and her staff.

The Heupels – Eric, Tammy, and their 12-year-old son, Johann – arrived to help the shop where Johann has attended "story time" since he was 3. Eric took a day off work to ferry crates, while Tammy and Johann volunteered for a week, alphabetizing and organizing stock.

"We were worried that if it took too long, it would be too damaging to their sales and they might not open at all," says Tammy.

Not to worry. Three weeks after superstorm Sandy, on Nov. 16 at 11 a.m., Bank Square Books reopened for business. "We couldn't have done it without the help of our community," says Philbrick. "It was pretty incredible."

That community support is by no means unique to Bank Square Books, and it may be the secret ingredient behind a quiet resurgence of independent bookstores, which were supposed to go the way of the stone tablet – done in first by the national chains, then Amazon, and then e-books.

A funny thing happened on the way to the funeral.

While beloved bookstores still close down every year, sales at independent bookstores overall are rising, established independents are expanding, and new ones are popping up from Brooklyn to Big Stone Gap, Va. Bookstore owners credit the modest increases to everything from the shuttering of Borders to the rise of the "buy local" movement to a get-'er-done outlook among the indies that would shame Larry the Cable Guy. If they have to sell cheesecake or run a summer camp to survive, add it to the to-do list.

"2012 was the year of the bookstore," says Wendy Welch, co-owner of Tales of the Lonesome Pine in Virginia and author of the 2012 memoir "The Little Bookstore of Big Stone Gap." In her memoir, she recounts how she and her husband, Jack Beck, created – sometimes despite themselves – a successful used-book store in a town that, by any business measure, is too small to support one.

"Jack and I will never be rich. But we found a place where people said there wasn't a market and we said 'yes there was,' " says Ms. Welch. "We feel like it's important for bookslingers to hang together – we'll hang together or we'll hang separately.... And we're holding the line."

Sales at independent bookstores rose about 8 percent in 2012 over 2011, according to a survey by the American Booksellers Association (ABA). This growth was all the more remarkable since the sales of the national chain Barnes & Noble were so tepid. "I think the worst days of the independents are behind them," says Jim Milliot, coeditorial director for Publishers Weekly magazine. "The demise of traditional print books has been a bit overblown. Everybody is a little anxious, but they are starting to think they've figured it out for the time being."

Independents are valued more these days by publishers, who need them for their print sales. Their small size and low infrastructure – seen as a liability in the mid-1990s – are also considered an advantage.

"We absolutely believe indies are the small, fast-moving mammals in this dynamic," said Michael Tamblyn, chief content officer of Kobo, speaking at the ABA's Winter Institute in Kansas City, Mo., in February. In November, Kobo, a Toronto-based e-reading company, partnered with the ABA to sell e-readers and e-books at independent stores. So far, about 450 have signed on.

"If e-books are the asteroid hitting this planet, small independent bookstores are the ones most likely to come out the other side," said Mr. Tamblyn.

* * *

Industry insiders believe several other developments have helped revive indies in recent years. One has been widely cited as an example of bookstores' shaky paperbound future.

"Part of the reason we had a good 2012 was that Borders went away," says ABA head Oren Teicher, of the Michigan-based chain that closed its remaining stores in 2011. "Some number of those customers shopping at bricks-and-mortars have found a way to independent stores."

A second factor is the buy-local movement, which has grown steadily over the past five years. It has benefited everyone from restaurateurs to toy store owners to artisan soap and jam makers to those who run creaky-floored hardware stores. Independent bookstores are what urbanists call "third places," like farmers' markets, that add to a community's sense of identity. And like farmers' markets, some customers come for the atmosphere, not the prices.

"The localism movement in America has really reached a tipping point," says Mr. Teicher. "It's no longer just a few people out there preaching localism."

In addition, the rise of social media means that bookstores can reach customers without the benefit of giant advertising budgets. And the cost of payroll and inventory systems, which used to be prohibitively expensive for a small store, have come down.

"Technology has really helped level the playing field enormously in how our members can be competitive," says Teicher.

For the most part, gone are the days of the hobbyist who opened an independent bookstore because he or she just loved to read. In fact, Daniel Goldin, owner of the Boswell Book Company in Milwaukee, recently refused to pose for a newspaper while reading a book.

"We don't read in the store," says Mr. Goldin, who has, however, been known to open up at 7 a.m. for a regular customer or drive two hours to help out an author at an event.

Today's owners often have researched the business and worked in other stores before they started putting up shelves. Goldin, for example, worked as a buyer for Schwartz Books and bought his storefront location from the former owners when the local chain closed in 2009 after 82 years.

In another encouraging sign, John Mutter, editor in chief of Shelf Awareness, publisher of two industry newsletters, sees more young owners than he did five years ago, when industry events "were a sea of gray hair," he says.

At bookstores nationwide, the community event has replaced the cat as de rigueur. Independents have added cafes and costume plays, and sell everything from locally made cards, T-shirts, and toys to chocolates and calendars.

In Austin, Texas, Steve Bercu, owner of the 28,000-square-foot BookPeople, has a camp director on staff. The full-time employee runs the store's popular Camp Half-Blood, modeled after Rick Riordan's bestselling "Percy Jackson" series about demigods living in modern America. In addition to climbing walls and swimming, the 11-to-14-year-old campers learn about Greek and Roman mythology from university classical scholars.

Every November, parents line up at 4 a.m. to get tickets, which sell out within hours for the next summer – some have even camped out overnight to secure their child a spot. Mr. Bercu also has added a "Ranger's Apprentice" camp and, new this summer, a "Star Wars" camp.

"People are loyal to us as customers because their children are loyal to us as campers," says Bercu, whose store opened in Austin in 1970.

But surely business was better in the good old days – when Amazon was just a river in South America?

"We had the best year in store history in 2012," says Bercu, a founder of the Austin Independent Business Alliance, which promotes locally owned businesses. "It was the third best year in a row. We're up 12 percent so far for 2013."

Not only independents' sales, but their ranks, are growing, too – albeit modestly. In 2009, the low point for its membership, the ABA had 1,401 members with 1,651 locations across the United States. Since then, the ABA has seen three straight years of growth. As of May 2012, it had 1,567 members with 1,900 locations. In January, Publishers Weekly magazine reported that the ABA had added another 40 bookstores in 24 states.

"I know it kind of flies in the face of what a lot of people kind of presume is the 'You've Got Mail' syndrome," says Teicher.

Today, in some cities, independents have outlasted the chains. In Santa Barbara, Calif., both Borders and Barnes & Noble have closed. Chaucer's Bookstore, founded in 1974, is still dispensing novels.

And while everyone is supposed to be staring into an e-reader in the future, instead of flipping pages, Mr. Mutter says studies show that digital books are not heading for 100 percent market saturation. In fact, he notes, "some people who switched to digital have switched back."

* * *

E-books are just the latest in a string of threats that were supposed to kill off independents. In the 1930s, some people believed the paperback would mean the death of bookstores. In the 1970s, it was mall chains like B. Dalton and Waldenbooks.

"Those are all gone now," says Mutter.

Another factor that may be contributing to the independents' survival is that so many bookstores have closed, they have found a sustainable level. From 2000 to 2007, 1,000 bookstores went out of business in the US, according to federal statistics. Collectively, independents have about a 10 percent share of the market, compared with Amazon's 29 percent and Barnes & Noble's 20 percent.

None of this is to say that closures have stopped. Pudd'nhead Books in St. Louis, Archivia Books in New York, and Rainy Day Books in Tillamook, Ore., are among those that shut down in December.

Yet new ones are sprouting up to take their place. In Brooklyn, where the Partners & Crime Mystery Booksellers closed last year, several new bookstores have opened.

One, sci-fi bookstore Singularity & Co., relies on a business model with several different income streams – including all four partners working additional jobs. Co-owner Ash Kalb, for example, is a lawyer who works with tech start-ups. "I have the best law office in the world," he says. "My law office is a sci-fi bookshop."

Singularity & Co. started as a publisher. It rescues one out-of-print science-fiction title a month, purchases the rights from the copyright holder, and republishes the book digitally. Subscribers get access for a $29 annual fee, or can buy a title individually.

The seed money came from a Kickstarter fundraising campaign that brought in a reported $57,000. Singularity's subscriber base now numbers in the thousands.

One book published last year, "Mr. Stran-ger's Sealed Packet," had fewer than 10 copies left in existence, according to Mr. Kalb. So he drove to West Virginia and borrowed a copy from an Episcopal retreat to "very delicately photograph every page."

In its quest to locate obscure titles in need of rescuing, Singularity & Co. was acquiring "thousands and thousands of books," says Kalb, who filled a room in his apartment. The Brooklyn store just opened last August, and Kalb says that so far, it's sold a year's worth of books in six months.

The diversified income streams from the publishing wing, physical bookstore, and a website help alleviate some of the economic pressure. As for choosing the type of books it wants to sell, that's easy.

"It's all the stuff I wanted when I was 13 years old," says Kalb.

In another encouraging sign for the industry, many existing independent bookstores are expanding their shelf space. In January, Trident Booksellers & Cafe in Boston, which was founded in 1984, added a second floor, bringing the store's total footprint to more than 6,000 square feet.

WORD, the first English-speaking bookstore in Brooklyn's Greenpoint neighborhood – famed for its bibliophile basketball league and matchmaking service for bookworms – is opening a second branch and cafe in Jersey City, N.J., this spring. Sales were up 41 percent in 2012.

"These days, community-building is the most important key to an indie bookstore's success," says owner Christine Onaroti. "I believe that the days of just putting books on a shelf and hoping people will come in to buy them – [that] is not realistic.... There's not a lot of room for pretentious, snooty booksellers these days."

In Kalamazoo, Mich., independent bookstore Bookbug doubled in size at the end of 2011, expanding into the space operated by a now-defunct Young Chefs Academy. The bookstore, which opened in 2008 at the height of the Great Recession as a children's bookstore, has seen its sales grow by more than 70 percent each of the past two years.

"We knew full well the reality of the book business in 2008," says Joanna Parzakonis, who owns the store with her husband, Derek Molitor, and partner Nicole Butz.

When Bookbug opened, Kalamazoo had a used-book store, Kazoo Books, with two branches, as well as an antiquarian bookstore and the Michigan News Agency, which sells paperbacks. A Barnes & Noble is located in neighboring Portage. But the town already had lost an independent bookstore, Athena, which closed in 2004.

"Barnes & Noble was here. The big-box stores were here. Amazon was existent. Those factors were not relevant to us," says Ms. Parzakonis, sitting on a comfy gray couch with Scrabble tile pillows spelling "S-I-T." T-shirts emblazoned with cover art from "A Wrinkle in Time" and "The Raven" hang near the register.

The bookstore's most prominent feature is a playhouse, shingled with oversized covers of classic children's books. A manual typewriter sits on a top shelf and is popular among teens and tweens, who leave messages for Parzakonis.

"We wanted to create an environment that was not only a place to sell books, but a place to talk about books, to welcome authors, musicians, artists," says Parzakonis.

Bookbug has hosted bestselling authors such as "Diary of a Wimpy Kid" creator Jeff Kinney and local artists who teach kids how to draw things such as fairies and dragons. It does so much community outreach that it was nominated in February for a community award from the Women's National Book Association in Washington.

"We have to be proactive in a different way," says Parzakonis. "Earlier, people just came because you were where the books are."

* * *

Not every bookseller sees more book buyers in their future – even ones who are part of the expansion.

"My business is great. My book business is not," says Thomas Wright, owner of the Battery Park Book Exchange and Champagne Bar in Asheville, N.C., a mountain city with a "phobia" about chain stores. (You won't find a Starbucks or McDonald's downtown.) "There's been a loss of so many of them [bookstores], we may be at the dead cat bounce."

A few years ago, Mr. Wright added a wine bar – serving cheese boards, summer sausages, olives, and jams – and a cafe serving Italian sodas and specialty coffees, as well as locally made bread, cakes, and chocolates. Eighty percent of the Book Exchange's sales now come from food and beverages – not books.

"I had to do something to keep the bookstore open. This is what I've done," says Wright, a self-described "book-a-phile" who spends almost as much time talking up other Asheville bookstores as discussing his own store's survival strategy.

"It's a meeting place. We basically sell conviviality at a price," he says. "For the most part, our books are probably viewed as wallpaper."

While Battery Park Book Exchange seems to have found an economic model that works, Wright doesn't see business schools turning out ranks of future booksellers. Tomorrow's capitalists are probably better off sticking with finance than fiction.

Someone forgot to tell that to Matthew Norcross. The former trader on the Chicago Board of Trade moved home to Petoskey, Mich., in 2002, planning to apply to grad schools. Instead, he ended up working at his mom's bookstore, McLean & Eakin Booksellers, where he met his wife, Jessilyn. Three years ago, they bought the store.

The Norcrosses have thrown themselves into the digital side of bookselling, with an online customer base that is third among ABA members. Powell's, the Oregon indie legend, is first by a wide margin. Jessilyn Norcross's weekly e-mail list has 4,000 subscribers – not an unusually large amount, until you consider that Petoskey's year-round population is 5,000.

"Where you win this fight is how many customers you get in your system," says Mr. Norcross. "How many people have decided to buy e-books from you?"

The loyalty of local patrons to an institution as comfortable and quirky as a pair of Chuck Taylors remains a powerful draw for many independent bookstores, though, too. Just ask Jean Haller, who, like Philbrick, saw her dreams of bookselling almost vanish in a calamity.

On Nov. 13, 2011, her self-help bookstore in Pittsburgh, Journeys of Life, burned down. It was a total loss: The fire was so hot the card racks and ceiling fan wilted like dying plants.

At the time, she was 62. She thought "for about 10 minutes" about just taking the insurance money. "I knew I was never going to be able to sell it for what it's worth," says Ms. Haller. "I couldn't do it. Being as invested with the community as I was, that's not the way I wanted to go out."

The community, her vendors, and pub-lishers all rallied behind her. One trade show sent her cash. Vendor reps showed up with boxes of items to sell. Volunteers painted the walls of a temporary store. Others brandished sticker guns to price everything.

"The support was phenomenal," says Haller. "People kept asking, 'What can we do? What can we do?' "

Her reply: "Come and shop."

She opened two weeks later. Her customers came, with open wallets.

Haller, whose good fortune has continued – she just recorded the second-best January in 22 years in business – has a name for her store's rebirth: "Journeys of Life: Rising from the Ashes."