The holiday sales results were nearly identical at the nation's two major bookstore chains and at many independents—a pick-up in business before and after Christmas was not enough to offset a slow start and, as a result, sales were generally below forecasts.
Barnes & Noble reported that for the nine-week period from November 3 to January 4, total bookstore sales rose 1.3%, to $969.6 million. Superstore sales increased 3.7% in the period, to $896.4 million, although same-store sales were down 3%. Sales at B. Dalton plunged 21.2%, to $73.2 million, due to the closing of 43 stores and an 11.5% decline in comparable-store sales. B&N chief financial officer Larry Zilavy said slow store traffic continued for much of the holiday period, although business did improve in the days right before and after Christmas.
Borders Group chairman Greg Josefowicz also noted that an increase in business immediately before and after Christmas "could not overcome the challenging sales environment" and, as a result, the company will likely fall short of its original forecast for the final quarter. Borders did not provide actual sales figures, but did report that fourth-quarter comparable-store sales at its superstores were down 2.5% through January 8, and were off 6.3% at Waldenbooks. Sales in its international segment were up 31%. With sales below estimates, Borders said that earnings in the quarter will range from $1.36 to $1.41 per share, compared to previous estimates of $1.41 to $1.45 per share.
The company said that during the period, sales in the book categories of general nonfiction, diet and fitness, business, and romance were strong; sales were also solid in the DVD, gifts and stationery, and electronic gift card categories. In a glimmer of good news, Borders spokesperson Anne Roman said that because the chain had ordered conservatively for the holiday period, returns are running at a normal rate.
Staff Cuts at Tattered Cover
Although initial reports from a handful of independents showed surprisingly good holiday sales, a broader PW poll found sales ranging from flat to down 11%. Despite the modest results, most booksellers were relieved things were not worse. As Dorise Blechman, assistant manager of the Anderson's Bookshop in Naperville, Ill., said, "We were down a little bit from last year, but not much. We still had a good holiday season."
Lackluster holiday sales and a sluggish regional economy caused two of Colorado's best-known independent bookstores to make adjustments.
Just before New Year's, Joyce Meskis, owner of Tattered Cover, laid off 27 of the store's staff of about 300. She said, "These are economic times that are pretty rough for retailers," and added that this marked the first time in the store's 28 years that she fired employees because of the economy. "We had to bring our payroll in line with what is coming in the door. It's the responsible decision, as hard as things are. They will be the first pool we'll look to when we get back to hiring again."
Meskis noted that "people still need books, but they may be buying one instead of two, or two instead of three. The book industry is less affected [by the economy], but it's not recession-proof, as people have suggested. We felt that since September 11 , sales have been far less predictable. We approached the holiday season with cautious optimism and ordered pretty conservatively."
At the Chinook Bookstore, four employees who left earlier in the year were not replaced. Owner Dick Noyes said, "It's been a tough two and a half years. The economy is only one of several elements. A year ago, we had another Borders store open too close for comfort. The coming war is a factor, too, but increasingly it's the economy."
In addition to not replacing the four departed employees, earlier in the year the store cut all salaries 10% for six months, and Noyes and his wife and co-owner, Judy, stopped drawing a salary. In addition, Noyes cut the store's advertising budget by two-thirds, "which is something they always tell you not to do in bookselling school and something we hate to do." Noyes describes the situation as "traveling back in time 10 years in terms of gross sales and the size of the staff."