The Battle of Britain -- the battle for Britain's book buyers, that is -- was recently fought not on the beaches, fields or hills but on the bridges and canals of Venice, the site of the winter session of the Mauri Foundation's advanced booksellers' school. There Alan Giles, managing director of the Waterstone's chain, analyzed -- for the first time in public -- "the American invasion of British bookselling." Giles opened the files on market studies detailing the impact of the arrival of Borders in the British Isles, studies suggesting that even without Waterstone's strenuous counterattack, the enemy's own weaknesses are likely to slow down its progress.

In fact, the Borders invasion was only one element in a turbulent year for the British trade, marked by W.H. Smith's takeover of its chief rival, John Menzies; the public listing of the fast-growing Ottakars retail chain, which is focused on smaller towns; the Amazon U.K. start-up; and of course, W.H. Smith's sale of Waterstone's to the music distributor HMV Media, where it was merged with the number-two specialist bookseller Dillons. The only respite, if it can be called that, came with the departure of a team of 15 that came to scout sites for Barnes &Noble superstores, although no one actually knows why they withdrew or whether or when they will return.

According to Giles's speech, following the arrival of the first Borders in London and Glasgow, Waterstone's marketers confessed to an admiration for the American store's "high accessible, classless environment" and easy browsing, adding that "at its worst," Waterstone's can be "intellectually intimidating." The studies concluded that at Borders the staff is helpful and the decor communicates a "visible signal" that customers can browse as much as they wish -- even without buying; that the U.S. chain is more welcoming to children and less condescending to older children; and that the coffee shops are successful customer draws (Waterstone's is now "vigorously installing more"). Giles commented, "I think the Americans are more focused on being good retailers, rather than just people who know a lot about books." Waterstone's will have to learn the same.

On the negative side, British customers find the Borders concept bland and lacking in style; the presence of music and magazines might save a companion less interested in books from being bored, but the space could better be used for an even wider range of books. Both the range and environment are "very American," as evidenced in the new Borders in Brighton, where there are more than three shelves of books on baseball and only half a shelf on soccer. "I think Borders will have to learn that Britain is very different from the United States," observed Giles. Britons are less likely to own an automobile, for example, with the result that shopping is concentrated in city centers. Borders is also going to have to watch its rental budgets in order to survive on Giles's side of the ocean.

For its part, Waterstone's has opened two large superstores of its own: one of nearly 30,000 sq. ft. in Glasgow (before Borders arrived), another in Manchester (actually an expansion to 25,000 sq. ft. of an existing outlet). The company will also open a drop-dead superstore later this year in London's Piccadilly -- a makeover of the famous Simpsons department store, a six-story Art Deco building that will provide 50,000 sq. ft. of selling space, the largest in Europe and only a little smaller than the Barnes &Noble giants in New York City. Waterstone's has borrowed American ideas, Giles admitted, but is also heavily influenced by the large Hugendubel outlets in Germany.

Giles summed up by saying that he is convinced that superstores do increase sales, particularly in dense downtown areas but he also happens to think that Americans may find that there are less congested, faster growing markets other than in the U.K. Yet he expects to see both Borders and Barnes &Noble in Britain in the next millennium, with fewer independents (up to 50% fewer) -- but they should be much better ones and increasingly specialized. Giles predicts that the American superstores and online retail giants such as, with their "unsustainable" level of losses, will have to eventually drop their deep discounts in order to survive, while "the city center bookshop, with its evolution to the superstore format, will be a major leisure and shopping destination."