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Brazil's Biggest Bookseller Expands Vertically
Sally Taylor -- 1/10/00

When Pedro Herz began expanding Livraria Cultura, the bookstore he founded in 1969, he decided to grow vertically -- quite literally. Rather than open more branches of the same store in and around Sao Paulo, he expanded within the store's fashionable building downtown, where he shares space with restaurants, coffee shops and movie houses.

Now the store has four different retail operations, all selling different kinds of books, all in the same building.

"None of our stores compete with each other," he said, adding proudly, "We are one of the anchors of this mall."

Working with sons Fabio and Sergio, Herz is adding music and magazines to the mix in a new store with 36,000 square feet of retail space this April. Livraria Cultura already has 100,000 titles, including the one of the largest collections of books in English in the country, on the shelves and in its warehouses.

The company was a pioneer in online bookselling, which Herz considers "just one piece of the puzzle of bookselling. We need all the pieces working together to be successful."

Set up in 1995, Livraria Cultura's Web site (www.livcultura.com.br) was one of the first in Latin America. It had sales of $1.5 million last year and gets more than 8,000 visitors a day, according to Herz. "We wouldn't do it if it wasn't profitable," he added.

While imported titles are 35% of sales, unlike many South American book retailers, Livraria Cultura handles neither STM (scientific, technical and medical) titles nor door-to-door sales.

In the current market, that is to the bookseller's advantage. Door-to-door sales have been hurt by the slowed economy this year. International STM sales are being impacted heavily by online services like Amazon.com, which can offer American prices plus shipping, amounting to a big discount from what professionals have been accustomed to paying.

But retail prices for imported books are coming down, across the board, according to Herz, adding to the pressure to be "very attractively priced to be competitive."

Herz reports that 1999 has been an excellent year for the store, in spite of the devaluation of the Brazilian currency last winter (which forced the Brazilian government to switch to a floating exchange rate). "Imports will grow for us," he predicts. "Especially more business from Europe. The only language that isn't growing is German."

English-language teaching materials are also hot. ELT specialist Cambridge University Press says Brazil is its number one foreign market. One of Livraria Cultura's stores sells nothing but foreign-language learning materials. And Herz banks on reference and backlist classics for his future growth.
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