With Borders's announcement earlier this month that it is closing 200 of its mall-based, small-format Waldenbooks, Borders Express, and Borders Outlet stores, coupled with Barnes & Noble's shuttering of the last 50 B. Dalton Booksellers, industry watchers like Mike Shatzkin, CEO of the Idea Logical, say that 2009 marks the end of the mall-store era in bookselling. Even though Borders is holding on to 130 Waldens along with seasonal mall kiosks like its more than 500 Day by Day Calendar Co. stores, there is little evidence to suggest that small-format bookstores will be returning to malls any time soon. And for the most part, independent booksellers, even with the prospect of a break on rents, do not appear to view the downsizing of Walden as a chance to open stores in new areas.
“You have to wonder,” said Jon Platt, owner of Nonesuch Books & Cards located in shopping centers in South Portland and Saco, Maine, “if Walden didn't do well with all that backing, why an independent would. We get called about three or four times a year by developers in our area. They see it like veal marsala with a glass of red wine, wouldn't it be nice to have a bookstore, especially if it were free.” He also questions whether independents can afford the rents for national malls, which, when he checked a few years ago, were between $25 and $30 a square foot, with unstated CAM (common area maintenance fees). “That's where you can really get pounded,” he said. “You have to be really careful with leases. They can put in all kinds of management clauses.”
Beyond rent issues there are other considerations, like decreased customer traffic at malls. Citing real estate research firm Reis, Inc., Reuters reported last month that overall vacancy rates at U.S. strip malls, which include local shopping centers and big-box centers, were at a 17-year high for the third quarter. Two of the Waldens slated to close are located at malls on U.S. News & World Report's list of the 10 most “endangered” malls. One, the Chambersburg Mall in Chambersburg, Pa., has already lost three stores to bankruptcy this year—K.B. Toys, Value City, and B. Moss.
But for the right mall, an independent still can work. At least that's what Dean Swift, a retired plant manager, and his wife, Edie, who managed a Books-A-Million and a Bookland, are counting on. They opened Swift Books in a 2,000-sq. -ft. former Walden at the Prince of Orange Mall in Orangeburg, S.C., in May. The location is good, said Dean, noting that the area is home to four colleges, and Swift Books is the only general bookstore within a 45-minute driving radius. Even so, the Swifts' bank turned them down because of the growing popularity of the Kindle and e-books. In the end, they got some financing, but had to invest more of their own money than they had originally planned. “We realized going in, it was never going to be a great thing financially,” said Dean, adding, “we're doing okay. We provide a good service for the community and have a strong backlist.”
Many in bookselling don't believe malls make the best setting for an independent bookstore. “Generally speaking, successful indies thrive in neighborhood or community-oriented shopping areas amid other retailers, often independent as well,” said Hut Landon, executive director of the Northern California Independent Booksellers Association. “Developers or shopping center retailers who query NCIBA about a bookstore for their mall understand in theory why a bookstore would be an asset, but have no understanding of what makes an independent bookstore tick.”
CenterCal Properties, however, is so convinced that it knows how to run a bookstore that when Bay Area indie booksellers were unwilling to move into CenterCal's newly revamped Blackhawk Plaza in Danville, the retail developer decided to open a bookstore of its own. “A bookstore, to me, is a wonderful amenity,” said CEO Fred Bruning, who reads three books a week. “A bookstore is very similar to having a Peet's Coffee or a Starbucks. It's a gathering place, a place where you can interact with other people and authors.” Over the November 21—22 weekend, CenterCal will open 4,000-sq.-ft. Read, one of the few bookstores with an outdoor seating area, where customers are encouraged to, well, read. In fact, Bruning is so certain this model will work and of the importance of filling the gap in the market left by Walden that he is already considering more Read outlets.
Other developers have stepped in to fill the void when tenants close. That's what happened when Tatnuck Booksellers at the Westborough Shopping Center in Westborough, Mass., went out of business in 2006. Shopping center owner Julio Enterprises took over the store and name, revamped the inventory, and put the bookstore on sound financial footing. Under its new management, Tatnuck continues to promote itself as the largest independent bookstore in New England.
Whether booksellers view the shopping mall glass as half-empty or half-full may depend as much on their age as economics. Dana Brigham, manager of Brookline Booksmith in Brookline, Mass., which added a former Lauriat's location in Wellesley a decade ago after the regional chain closed, said she wouldn't do it now. “Our reasons have to do with the three owners aging and looking at succession issues,” she noted. “The recent price wars certainly don't calm bookseller nerves. Add Kindle and all the other bookselling issues, and it seems like a risky venture to expand.”