Atlanta's Chapter 11 Buys Former Walden

As bookstore closings go, the announcement that Borders Group would shut down the Waldenbooks store in the Norcross area of Atlanta, Ga., seemed unremarkable. After all, Borders has closed many "under-performing" Waldens in the past few years as it focuses ever more on superstores. But after the announcement, "hundreds and hundreds" of the store's customers wrote letters, called and even Fed Exed notice of their displeasure to Borders, according to assistant manager George Scott.

Although the store ceased business on January 24, this chain store closing story has a different ending—a new chapter, so to speak. If you had happened to be in the Norcross Waldenbooks in the weeks before it closed on January 24, you might have noticed a man who, instead of buying books, was intently observing how the store's staff worked. Perry Tanner is something of an expert in the matter—a former marketing executive, he owns Chapter 11 Books, which has 14 stores in and around Atlanta. Having heard about Borders's decision and its customers' response, Tanner wanted to see for himself why the store's customers were so upset about its closure and whether they might return if Tanner opened a Chapter 11 store in the same location. Scott told PW, "My customers aren't just my customers, they're friends of mine. They respect our opinions. They read what we read."

After watching the staff members interact with customers, Tanner decided to make a rare move in the bookselling industry: the independent would purchase the chain store and turn it into an indie.

The new Chapter 11 had a soft opening during the first week of March and hosted its first author signing. "For better or for worse," Tanner said, "the books we sell are the same books that the competition sells. It really comes down to, 'Are we better handsellers?' " Tanner's decision to buy was based in part on the Walden's staff skill at handselling. Scott, who had worked in various capacities at the Norcross Walden for six years, and store manager Amy Hartwig "are well-known by the customer base," Tanner noted.

After the Walden closed, Tanner approached Scott, Hartwig and an ex-Waldenbooks employee and asked them if they would like to return to work as Chapter 11 employees. Hartwig will again be a manager and Scott becomes the store's assistant manager.

"Here's a location where people bought books for 15 years," Tanner commented. "Here's a management team that has 15-plus years of experience. It seems like a no-brainer. It's never that easy, but clearly you've got too many good things going in your favor to not give it a shot."

But it wasn't just the proficiency of the staff or the loyalty of the customers that swayed Tanner. "This was a pocket where we didn't have a store," Tanner said. The nearest Chapter 11 is 10 miles away. And the freestanding store's 4,000-sq.-ft. size is comparable with that of most other Chapter 11 locations.

The purchase was also made possible because "Chapter 11 has nowhere near the overhead that Borders Group and Waldenbooks has," Tanner said. "I looked at the performance and the yearly revenues. It works for us. We have to stay on top of traditional costs—labor expense, the lease—but, quite honestly, we found that the customers wanted the store to stay in the neighborhood and we were able to work out something that was very economical for us."