Ruminations on the Closing of a Bookstore

By R. David Unowsky

We weren't in it for the money. Many of us who started bookstores in the '60s and '70s wanted to change the world: end the war (all war). We saw our bookstores as part of the movement for civil rights, women's rights, gay rights, environmentalism. We had a strong distrust of the corporate world. We believed in the power of words and ideas and that the pen was indeed mightier than the sword. And we applied our sense of social and economic justice to our own businesses. At Hungry Mind/Ruminator, most of the staff was salaried and received paid vacations, fully paid healthcare plans, 401K, and paid maternity and paternity leave.

In many ways, we succeeded beyond our wildest dreams. Thirty or 40 of us, working independently, convinced publishers to send us their authors and the modern author tour was created. Whereas it used to be New York, maybe one stop in Boston or D.C., and the long trip passing flyover country to California, the new tour could include 15 or 20 stops and extend from Boca Raton to Bellingham, Washington, from Manchester Center, Vermont, to Santa Cruz, California, with stops in between in St. Paul, Iowa City, Denver, Boulder, Seattle, Milwaukee, Missoula, and Oxford, Mississippi (sorry I couldn't list them all). Our three or four person shops grew exponentially. By the year 2000, Hungry Mind had two-and-a-half stores, a magazine, and part of a publishing company, employing over 50 people. Others grew much larger.

For us -- and for others -- this created many problems. We never successfully made the transition from founder-dominated little stores to well-organized "real" businesses. Through the '90s, the number of "superstores" in our market went from zero to 22; our sales tripled yet we never made much money, never built any equity, and weren't prepared for the inevitable perfect storm that hit us from 1998 to 2001: operating losses due to internal shortcomings, overexpansion, a large investment in technology, and the rise of e-commerce. Only the sale of our name prevented the store's demise. It was indeed a very large tourniquet, but not enough to prevent a continuing downward spiral of diminished inventory, loss of business, and more red ink.

Having tried various ways to raise money -- SBA, private placement, and direct public offering, we were within three days of closing when our angel appeared. Impressed by the outpouring of public support, he was prepared to do what was necessary to make the business healthy. Besides money, he brought solid financial and marketing skills to the table. We began to rebuild our inventory; from January to June of 2004, our volume -- having bottomed out -- doubled. He negotiated a deal with our landlord and major creditor, Macalester College, to settle our debts and move forward with a lease and a textbook agreement. In April, just as a deal was about to be signed, the real estate trust of Mac, Inc. changed the terms of the lease -- apparently they have real estate development plans (condos) for our parking lot. After two futile months of "renegiations," we accepted the revised (and lousy) terms. Our acceptance was met by their letter rescinding their offer; ten days later we received an eviction notice.

For those who think it's inevitable that independents will disappear and that the retail world will all be big chains, I say humbug and hogwash. Plenty of booksellers have made the necessary transitions to survive and to thrive, and the next generation will be smarter business folk. They do, however, need to keep in mind Unowsky's three rules of independent stores [apologies to Nelson Ahlgren ("Never play poker with a man named 'Doc'") and Satchel Paige ("Don't look back, something might be gaining on you")].

1. Be good, but not too good: Temper your idealism with some good, hard-nosed business sense and hire people with the skills you need for the 21st century.
2. Don't let your reach exceed your grasp (or is it vice versa?). Sometimes small really is beautiful. Don't expand without the proper capitalization, business plan, and expertise.
3. Beware of foreign entanglements and the industrial-educational complex. Don't tie yourself too closely to one institution. Administrators and boards change, and values like loyalty, community, and integrity get replaced by corporate image, real estate development, and "fiduciary responsibility."

Solidarity with the locally owned, independent businesses -- from now until the sun no longer sets. Hope to see ya soon,

David