Live from BEA -- Day Three
 Attendees browse the aisles Saturday at BookExpo America 2003 |
Succession Planning Reloaded
On Saturday morning, approximately 60 current bookstore owners -- and one prospective buyer -- came together at a session that Ivan Barkhorn, a consultant to ABA on strategic matters and a partner in Meridian Strategy Group, described as Succession Planning II, or "Succession Planning Reloaded." The session was built upon issues discussed at a well-received seminar on succession planning held at last year's BEA in New York City. That first session focused on developing a thorough sales document, choosing the best succession option, knowing your ideal buyers, and making an orderly transition, among other things. (An outline of that presentation is available on ABA's Web site at http://www.bookweb.org/read/5797.)
This year, Kevin Ryan, who, with two other partners, is assuming ownership of Green Apple Books in San Francisco over a 10-year period, discussed aspects of an employee purchase of a bookstore. In addition, Barkhorn focused on valuation approaches, providing examples for imaginary and composite businesses.
Ryan explained how the deal worked out with the Green Apple's founder, Richard Savoy, allowed Savoy to maintain full control of the business for seven years as the purchasers bought 3/4 of a share each year for 10 years, with a contractually agreed upon price for the final 25 percent of the business at the end of 10 years. Further, he described how Savoy receives a fixed salary for the duration of the contract, and the purchasing partners share all profits after the purchase of stock. In addition, the purchasers must meet contractual financial targets.
Ryan also described how the process to work out the terms of the agreement took years, a negotiation requiring much trust amongst the purchasers and owner. (To read an earlier Bookselling This Week (BTW) article on the purchase of Green Apple Books, go to http://news.bookweb.org/read/1128.)
Barkhorn's presentation discussed four valuation approaches: the Market Approach, Horse Trading, Cash Flow, and Excess Earnings methods, but he focused on the last two, which he said provide the most accurate and useful information. He examined these two methods, using the examples of two imaginary bookstores of different sizes, and an example created by combining the figures of three actual bookstores.
The Succession Planning session at this year's BEA was recorded, and Barkhorn's slide presentation will be posted in the Professional Development section of BookWeb.org. Materials will be available soon after the show; look for details in future issues of BTW.
Barkhorn also recommended the title Business Valuation: Body of Knowledge by Shannon P. Pratt (Wiley) to booksellers who want "to become a valuation expert."
Economic Impact of Locally Owned Businesses
This morning's session "Economic Impact of Locally Owned Businesses" attracted a large crowd of independent booksellers, who heard Steve Bercu, CEO of BookPeople, and Dan Houston of Civic Economics discuss their published report that details how local retailers contribute more to the local economy than do national retailers. The session was moderated by ABA COO Oren Teicher.
Bercu kicked off the discussion, talking about how he became politically engaged in the Austin community. "In early 2000, I got the news that a developer was going to create a development across the street from me [at Sixth and Lamar]," he told attendees. "I thought, well, I have two choices. I could either whine a lot and ask everyone to 'Please love me,' or my other choice was to actually do something."
Bercu explained how the decision to do something was the catalyst for the creation of the Austin Independent Business Alliance (AIBA). Soon after, the alliance found out that Borders had signed a lease to open a store at Sixth and Lamar. Furthermore, the developer could very possibly receive incentives to build the development anchored by a national chain. So Bercu, along with Waterloo Records, decided to launch an effort to keep the developer from getting the incentives, and, he explained, "No one was considering what the impact would be on neighboring businesses."
Eventually, a local community organization, Liveable City, and AIBA, commissioned Civic Economics to do a study to show the economic impact of local merchants versus national chains. The study, "Economic Impact Analysis -- A Case Study: Local Merchants vs. Chain Retailers," (http://www.bookweb.org/graphics/pdfs/lamar.pdf) indicated that local retailers put more money back into the local economy. Overall, Bercu's efforts and the report garnered widespread media coverage, and, about four weeks ago, Borders decided to pull out of the development.
Dan Houston, a partner in Civic Economics, followed Bercu and led attendees through the report, discussing the methodology and the findings. The session prompted numerous questions and comments from the large audience, many in regards to how the study could be applied in their own community.
Watch for more coverage on this session in upcoming issues of BTW.
Terrorism, Dissent, and the First Amendment
This afternoon's ABFFE panel, "Terrorism, Dissent, and the First Amendment," was standing room only, as over 170 convention attendees converged to hear a rousing discussion on the threat to Americans' civil liberties in the wake of September 11. The panelists for the session were Rep. Bernie Sanders (I-VT), and attorney David Cole, author of Terrorism and the Constitution (New Press). Gloria Feldt, president of Planned Parenthood, and author of Behind Every Choice Is a Story (University of North Texas Press), moderated the panel.
Prior to introducing Sanders and Cole, Feldt noted, "I'm delighted to be here, but more, a little horrified that there needs to be a panel [such as this]."
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Cole began his talk by placing the current threat to civil liberties in an historical context and warned attendees that the USA Patriot Act is "only a small part of the actions the government has taken to fight terrorism" that impinge on Constitutional freedoms. He stressed that, presently, the laws passed in the wake of 9/11 are aimed at foreign nationals. However, he noted that, as has happened before in American history, these laws have a way of extending to American citizens over time. "The government always starts with foreign nationals," he said. "Inevitably, the government seeks ways to extend it to [American citizens]."
Following Cole, Rep. Sanders began by applauding Chris Finan, president of the American Booksellers Foundation for Free Expression, and Linda Ramsdell, owner of Galaxy Bookshop in Hardwick, Vermont, for their efforts to amend Section 215 of the USA Patriot Act, which grants the government the use of broad, new surveillance powers.
In March, Sanders introduced the Freedom to Read Protection Act in the House, which he now said has 105 co-sponsors. The act would bar the FBI from seeking records detailing a bookstore customer's purchases or a library patron's selections. On May 23, Sen. Barbara Boxer (D-CA) introduced a similar bill in the Senate.
Sanders proceeded to give a stirring speech that challenged attendees to fight back against the domination of the extreme right in Washington. "What's going on in Washington is not a battle, it's a rout," he said. "The extreme right has practically no opposition. The House is not run by conservatives, but by the extreme right…. I know you think George Bush is dumb, but [he is not dumb]…. We've got the problems, not him. He might be the most extreme right wing president in history."
Sanders speech did not mince words, and while he noted respect for some of his opponents in the House, he said, "These are tough guys, and not nice guys…. That is the world we live in." He stressed: "Let me be clear, I believe we can fight terrorism without undermining the Constitution."
Shelving & Selling Graphic Novels
The dynamic world of graphic novels (today's multifaceted version of the comic books of yore) was explored by experts in a Saturday panel attended by a knowledgeable audience eager to learn more about this fast-growing field.
"Comics now truly have something for every reader," said Rory Root, the veteran proprietor of Comic Relief in Berkeley, California, who's seen the genre move away from the periodical and into the book format. "The market is extremely diversified; nonfiction, history, romance, westerns, action-adventure … "
One huge genre within this overall format is manga: Japanese comics licensed for English-language publication. "Manga is driving sales across the board," said moderator Calvin Reid, Publishers Weekly news editor in charge of PW's graphic-novel reviews.
But the graphic novel umbrella also covers such literary titles as Art Spiegelman's Maus, the Pulitzer Prize-winning work that alerted many book buyers and sellers to the existence -- and aesthetic possibilities -- of a format estimated now to be a $100 million market.
With such a diversity of product, it's crucial that booksellers know the different types of graphic novels, from children's comics to young-adult books to adult fare. "Often these all get jumbled together," noted Drawn and Quarterly publisher Chris Oliveros, who said his firm's sales through general stores (as opposed to comic-book outlets) has gone from zero to 50 percent in the past five years. "It's important for retailers to understand there are different audiences for all these."
Paul Constant, who three years ago started the "graphica" section at Elliott Bay Books, has learned specific ins and outs of shelving graphic novels: "We have a young-adult section and a manga section; we put the young-adult manga in the young-adult section." Pulling books like Maus out of the general section and into a separate graphic section "actually did wonders for the sale of that book," said Constant.
Mike Roberson, sales rep for the graphic publisher Viz, suggested retailers pay special attention to which entries of popular series are stocked. "Our books are series based," said Roberson, who estimates Viz has seen triple-digit sales growth in the last three years. "How do you shelve 20-some volumes? You've got to carry the first couple books (in a series) and the latest ones -- because if someone starts reading the new one, they'll get hooked and want to go back to the beginning."
"Handselling is crucial" to success with graphic novels, said Root, whose customers range from teenage boys and girls to college students to their parents. "But you have to have someone who knows the books -- all the books. Learn what's out there, and put it to work for you."
Direct Marketing Techniques Booksellers Can Use to Boost Sales
Direct-marketing techniques booksellers can use to create and increase business were outlined by Lois Geller, direct-marketing guru and author (Response: The Complete Guide to Profitable Direct Marketing, Oxford), in a 90-minute afternoon presentation.
Such efforts need not be expensive to yield positive results, Geller said. E-mails offering special discounts or seasonal sales are virtually free. A bumper sticker that costs a cent and a half can generate future sales.
Move a two-book buyer up to the three-book range by offering a gift for that third purchase. "Surprise and delight" your best customers with an unexpected gift. Talk to your customers online, through a Web site where a store's personality comes through.
"Make your store a place people want to visit," urged Geller. But barring that -- they can still buy from you online.
ABACUS Session a Profitable One for Booksellers
Talking before a large crowd of independent booksellers on Friday, May 30, ABA CEO Avin Mark Domnitz presented the financial findings of the ABACUS 2003 study. Introducing the session, Domnitz told attendees, "In our heart of hearts, we hoped to put together 150 bookstore submissions [of financial data] -- we thought that would be a good sample. We ended up with 197 submissions."
Booksellers at the session were presented with a detailed review of the study's results, as Domnitz offered both background detail and analysis, explaining the import of a number of statistical "data slices," grouped by profitability levels, community type, and store size, among other categories.
One thing made clear by ABACUS, Domnitz said, was that two critical factors in bookstore profitability were wages/salaries and occupancy expenses. Payroll expenses played a significant roll in profitability, the study showed. "It is an indicator of productivity and profitability," Domnitz explained.
In addition, he noted that advertising costs for the high profitability stores were a much smaller percentage of sales than for low profitability stores, and said, "I know that's a result of people who are not collecting co-op." Because smaller stores are often faced with the challenge of collecting "little pieces from a lot of different publishers, and there are a lot of hoops to collect these, but I know that's a lot of money left on the table."
One result of the ABACUS study, Domnitz said, was that the analysis of high and low profitability stores made clear that the rolls of successful stores included examples in both rural and urban locations and a range of sales volumes. "It has nothing to do with size," Domnitz said.
Other issues discussed were occupancy rates, sales per selling square foot, and finances by sales volume. The study generated much interest from attendees, and the session ended with about 15 minutes of questions.
Look for more details on the ABACUS study in future issues of BTW.
Saturday Book & Author Breakfast
Hundreds of BEA attendees and the national audience of C-SPAN's BookTV joined four authors for BookExpo America's Book & Author Breakfast on Saturday. Among those watching the live TV broadcast was BEA's show manager, Greg Topalian, home in Connecticut, awaiting the birth of his first child. "He called me during the breakfast," said BEA's Roger Bilheimer. "He said that things were looking as if they were going well, and I told him they definitely were."
The voice of the breakfast host was familiar to booksellers -- NPR's Noah Adams, author of The Fliers: In Search of Wilbur and Orville Wright (Crown). Joining Adams on the dais were Jhumpa Lahiri, author of the novel The Namesake (Houghton Mifflin); Gerry Adams, author of A Further Shore: Ireland's Long Road to Peace (Random House); and Toni Morrison, author of Love: A Novel (Knopf).
For many booksellers, the Book & Author breakfasts are an essential wake-up call at BEA. "It touches your soul," said Dale Szczeblowski of The Concord Bookshop in Concord, Massachusetts. "It's always the case that they are always so different." Dana Brigham of Brookline Booksmith in Brookline, Massachusetts, said, "I love these breakfasts because, in a way, they complete a circle. This brings you back to the imaginative part of it all -- to hear how the authors write, how they work."
Lahiri, Pulitzer Prize winner for Interpreter of Maladies, offered an intriguing chronicle of the genesis of The Namesake, her first novel, as she charted the development of the work from its conception in 1997. As her first pregnancy and the tragedy of 9/11, as well as the growing awareness of her new identity as a prominent writer, affected the private world of her writing, her life became "a somewhat divided thing." Aware of the scrutiny of publishers, reviewers, and readers, Lahiri said that "such thoughts can compete fiercely with inspiration." However, having finished The Namesake, she expressed a renewed gratitude to all those in publishing and bookselling who work "to bring the worlds of authors to readers."
Morrison, too, offered booksellers her thanks, "not only for your welcome, but especially for what you have done over the years." Noting the pessimism in many quarters of the industry, she counseled optimism and an historical perspective. "All I have to say is that we have been here before," she said, remembering her first bookstore reading, for her novel The Bluest Eye, which attracted 12 people, "including the bookseller himself, his wife, and the librarian who stayed to introduce me." However, "in the days when the economic forecast was equally dire, we discovered just what it took to build a readership," she said. Through knowledge of their customers, merchandising skills, and optimism and energy, "in short, the art you have placed in selling," booksellers would convince customers "to give up two or three tens to buy Love" and other good books, she said.
Adams' new book chronicles the public and secret peace negotiations from the 1980s to 1998 between opposing forces in Northern Ireland. Set against such political reversals as the collapse of the Soviet Union and the fall of the Berlin Wall, Adams and other activists in Ireland questioned, "If Germany can be reunited, why not Ireland?" Maintaining that it's possible "for people to move mountains," he quoted the Irish nationalist Bobby Sands: "Our revolution will be the laughter of our children."
The ABFFE Online Auction Is Underway!
The ABFFE Online Auction is underway, offering booksellers around the country an opportunity to grab bargains like the ones that ABFFE will be offering in its traditional silent auction during BookExpo America in Los Angeles this weekend. Show your support for ABFFE, the bookseller's voice in the fight against censorship, and grab wonderful bargains at the same time! The online auction can be found on the ABFFE Web site, http://www.abffe.com. The auction ends Tuesday, June 10, at 5:00 p.m., Eastern Time.
Save money on a hotel and ticket package for one of the regional bookselling trade shows and books from Random House, Simon & Schuster, Daedalus Press, and Sterling Publishing. There are armfuls of autographed first editions from Denver's Tattered Cover Book Store and Square Books in Oxford, Mississippi, as well as boxes of new books autographed at BookExpo.
There are also many items that are just for fun. Flee work for a weekend stay at the luxurious Tarrytown House in Westchester County, New York! You will also find tickets for the Baltimore Orioles at Camden Yards and the New York Yankees at Yankee Stadium, an assortment of great movie DVDs, even videogames.
Join the ABFFE Online Auction today!
Reported by Dan Cullen, David Grogan, Rosemary Hawkins, and Tom Nolan.
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