Remarks by the CEO of a mall operator set off a firestorm of speculation in the media and book publishing industry last week about what plans Amazon might have for creating its own bricks-and-mortar bookstore chain. Sandy Mathrani, head of General Growth Properties, said in response to a question about his company’s fourth-quarter results that it is his understanding that Amazon’s goal is to open 300–400 bookstores. The comment came as Mathrani was trying to explain why physical retailers remain important even as more customers shop online.
Amazon had no comment on Mathrani’s remarks, which were made last Tuesday morning, and the company declined to elaborate when asked how Mathrani knew about Amazon’s plans. On Wednesday, GGP and Mathrani backtracked, issuing a statement claiming that Mathrani’s comment “was not intended to represent Amazon’s plans.” By that time, however, the book industry was filled with speculation about whether the report was true, why Amazon would undertake such an initiative, and whether the expansion was good for publishers.
Even as GGP was qualifying Mathrani’s remarks, news surfaced suggesting that Amazon is planning to open at least a few more stores beyond the one it has currently. On February 2, Amazon posted job openings for several bookstore positions in the San Diego/La Jolla, Calif., area. According to the job board postings, Amazon is currently looking to fill five positions: assistant store manager, bookseller, books lead, store manager, and device lead. Although the postings say Amazon is looking to hire multiple people to fill these roles, it’s unclear whether the company is trying to staff several potential stores or a single location.
Asked whether the job postings prove that the company is planning to open more Amazon Books locations, an Amazon spokesperson said the only publicly announced store is the one it opened in Seattle in December.
As with most issues that involve Amazon, publishers were reluctant to discuss what the company may or may not do with Amazon Books, although a few executives did speak for attribution. Sourcebooks CEO Dominique Raccah said she does not think Amazon will look to open hundreds of stores, but believes the most likely course of action is a strategic expansion to showcase its electronics—as well as some books.
Another industry executive, who requested anonymity, said a limited store rollout is the most probable scenario. He said Amazon has to be tempted to do something in physical retail given the success Apple has had in selling its devices through the Apple Store. After tweaking the operations of Amazon’s Seattle store, it would not be hard for the company to quickly open stores in major markets, this executive said. “There isn’t a mall operator in the country who would turn down an Amazon store,” he noted.
Kensington Publishing CEO Steve Zacharius questioned whether Amazon would open hundreds of stores that focus primarily on selling books that carry low margins, but he observed that if Barnes & Noble, Books-A-Million, or an independent chain announced it would open 400 outlets, “we’d all be jumping for joy.” Given Amazon’s dominant position in selling books, Zacharius said such a large bookstore expansion by the company could be a positive move for the industry—if “the books are sold at a reasonable price, not as loss leaders, so that everybody is competing on a fair basis.”
The head of another midsize independent publisher also pointed to Amazon’s strong market position and concluded that a large Amazon bookstore presence would be “unquestionably bad” for the industry. A big physical store footprint would position the company to take an even bigger slice of consumer book spending, the executive said. This executive feared that, rather than expanding the book market, a chain of Amazon bookstores would make it even harder for B&N to survive—and the survival of B&N is one of all publishers’ top priorities.
The executive also questioned whether an expansion into bricks-and-mortar was a wise move for Amazon. Noting the calls for the government to investigate the company over antitrust issues, the executive said creating a large a bookstore chain could draw more attention from regulators. “It could make them look too greedy,” he said.