Even though they’re a niche business, used-book stores have not been immune to the twin threats of the Kindle and the recession, which forced a number of stores to close. Like their new-book colleagues, used-book sellers are looking to new products and business models to survive and thrive. Many have turned to online selling through Abe, Amazon, and eBay. In areas where the recession is starting to recede, some are expanding their physical footprint. Others with relatively flat sales like Half Price Books, the largest independent bookstore chain in the country, continue to re-evaluate their business.
When Borders closed last year, a number of used-book stores saw sales decline. Kelley Ulmer, owner of the 7,800 sq. ft. Almost Perfect Bookstore, in Roseville, Calif., estimates that customers stocked up heavily at going out of business sales. Now they’re coming back, along with customers who switched to e-readers. “People are back to [physical] books now,” says Ulmer. “We’re not seeing prerecession sales, but we’re seeing first-year recession sales.”
At 28-year-old Downtown Books & News in Asheville, N.C., the used-book sister to Malaprop’s Bookstore/Cafe, sales are relatively flat. “Our business has been incrementally improving,” says store manager Julian Vorus, whose customers read both e-books and physical books. “We do hear people mentioning they are selling most of their books to us and going to e-readers,” he says. “We actually had one couple unload several hundred books. Then they came back the next day and bought some of the titles they had seen in the store on their first visit.”
Although Ulmer put her expansion plans on hold when the recession hit, Jackson Street Booksellers in Omaha’s Old Market is growing by 50%, from 4,000 to 6,000 sq. ft. In part that’s because Jackson Street is picking up the slack in a community that has lost at least 15 independent bookstores over the 18 years the store has been open. Still, says co-owner Amanda Lynch, “There are days when we sell more online. We do 30%–40% of our business online.”
Ukazoo Books, a bricks-and-mortar retailer begun by online bookseller Pro Quo, is in the midst of a growth spurt. Last fall it went from one store in the Baltimore suburb of Towson, Md., to three after opening in former Borders locations in Southgate, Mich., and Plymouth Meeting, Pa. Then in January Ukazoo added a store to its Toledo warehouse. According to Edward Whitfill, head of retailing, the mini-chain will open another four stores in Ohio and Michigan by year’s end. “At Towson,” says Whitfill, “we did 8% year versus year. This year 8% is way in our rearview mirror. It’s 10% looking like 20%. We’re quite excited by how much people still want books.” For Ukazoo the sweet spot is a 9,000-sq.-ft. space with about 85,000 books, a mix of 10% new bestsellers like Hunger Games and Fifty Shades of Gray and 90% used.
The six-store Bookman’s Exchange in Tucson, Ariz., looks like the used equivalent of a Barnes & Noble superstore with good lighting, carpeting, and furniture. It, too, is expanding, but in other ways. The stores, which are so pristine that some customers ask where the used books are, already carry CDs, DVDs, and tchotchkes. In November, they added used musical instruments and are on track to do $1.5 million in the first year, according to CEO Bob Oldfather. Bookman’s has a seventh store online, which contributes 25% to overall sales.
“In my mind, this is the second industrial revolution,” says Oldfather. “I know retail will never look like what it did.” After watching the number of available CDs dwindle, he predicts a similar fate for books. To protect the jobs of the 300 people who work at Bookman’s, he is planning to draw on his 36 years in used books and launch Bookman’s Recreation Exchange in Tucson this fall. “It’s going to be the same vibe, and that’s what we’re selling,” he says, along with sporting goods, exercise equipment, and sports books. “I want to make a sporting goods store that’s a place to hang out.” Oldfather would like to take the concept national.
Business is up 1% at Dallas-based Half Price Books, which is celebrating its 40th anniversary this year. But that hasn’t deterred the 115-store chain, in 16 states, from adding a new store recently in Naperville, Ill., or remodeling stores in Apple Valley, Minn., and Austin, Tex. “We see people coming in—they’re just buying less,” says executive v-p, marketing/development Kathy Doyle Thomas. “We’re looking at how we can control expenses. We will close unprofitable stores. If our potential customer base goes down, we’ll consolidate stores.”
Recently Half Price surveyed customers to find out if e-readers were eating into their business. “What we’re seeing is interest in both e-books and print books,” says Thomas. “It’s going to depend on how cheap e-readers are.” To entice customers, a third of whom don’t know what they’re going to buy when they enter the store, according to respondents, Half Price has begun adjusting its product mix. It is adding more puzzles and is testing other nonbook items like leashes in the pet section.
Twenty-one-year-old Gardner’s Used Books, Music, and Video in Tulsa, Okla., has a loyal following. So loyal that a couple of years ago when manager Gerry Mullenix ran an early-bird special, with all books 50% off between 6 and 9 a.m., 20 customers braved a blizzard, because they didn’t want to let him down. But customer loyalty only goes so far. “For us, sales are going down,” says Mullenix. “It’s not that we have fewer customers. This economy is worse than [the one following] 9/11. People are downsizing to small houses or small apartments.” He’s lowered prices and gotten heavier into comics, Dr. Who, Star Wars, and gift items. To bring in new customers, last year Mullenix launched a collection of Old Time Radio stations online (gbsradionetwork.com). Getting books is not a problem. Gardner’s is sitting on enough inventory in its three warehouses to stock 15 to 20 more stores.
Pulitzer Prize–winning author Larry McMurtry, owner of Booked Up in Archer City, Tex., has a different challenge: succession. “Many, many people enjoy holding a physical book,” he says. “I’m not suffering [from the Internet] at all. We offer our stock up against any stock in the world.” People drive 500 miles—some travel even farther, from Australia and increasingly China—to spend an afternoon at Booked Up, the country’s largest used-book store, which comprises four buildings with about 100,000 books each. McMurtry’s decided that given his age, 76 next month, and that no one in his family wants to take over, it’s time to downsize.
In 2005, McMurtry flirted with closing the store, which he describes as “an anthology of book stocks.” In August he’s planning to divest roughly 350,000 books in a sale modeled after the one in Washington, D.C., in 1971, where he acquired enough books to open his first store, in Georgetown. McMurtry plans to hold on to his personal library of 28,000 books and to condense the store into one building, the one with the cash register.