A Voluminous Store With a Tale to Tell

Powell’s Books’ flagship store is so large, visitors get a map at the door. But some people would never want to find their way out.

Visitors wander through the warehouse-sized store, which sprawls across an entire city block. They loll in a room dedicated to the arts, wander through a few aisles on metaphysics and browse shelves of nautical fiction.

Powell’s is one of the nation’s largest independent booksellers, offering 4.5 million new, used, rare and out-of-print books. It competes with the likes of Barnes & Noble, Borders and Amazon.com. But unlike many of its independent bookstore brethren, Powell’s survives and thrives.

“Powell’s is viewed as one of the preeminent bookshops in the world,” said Mitchell Kaplan, president of the American Booksellers Assn. “No one has done it the way Powell’s has done it.”

And no one but a Powell will continue to do it. Founder Michael Powell, 65, recently announced he was handing the business over to his 27-year-old daughter Emily -- renewing the commitment to keep Powell’s an independent, family-run endeavor.

The challenge for the bookstore’s next generation, experts say, is to continue the innovation that made it a quirky leader among corporate competitors.

Michael Powell was a graduate student in Chicago when he started his first bookstore in 1970, with the encouragement of friends and professors, including novelist Saul Bellow.

His father started the Portland store after visiting his son for the summer. When Michael joined his father in 1979, he moved the business to a larger location -- a former car dealership where it still stands. And he decided to sell new and used books on the same shelf, an unheard-of move that paid off.

Powell’s grew from one store to six, expanded its main store and launched an online business in 1994, just before Amazon.com. Online sales now make up about one-third of its revenue.

“It’s not enough to love books,” Michael Powell said. “You have to love the business of it.”

Powell was onto something early. Used books and online sales have revolutionized the bookselling industry in the last few years.

In recent years, used books have been a fast-growing segment of the business, according to the Book Industry Study Group. InfoTrends estimates that total used-book revenue exceeded $2.2 billion in 2004, when 111 million used books were sold, an increase of 11% over 2003.

And several companies have seen their online sales soar in recent years. “The truth is we way underestimate the breadth of interest people have in books,” Powell said.

Powell’s has staff who scour the globe for the best used books and even go on the road to hold weekend used-book buying events around the country. The result is an inventory that could provide a book to each of the Portland area’s 2 million residents and still have 60% of its stock.

“The conflict is that inventory for the longest time has been dictated by a store’s physical size,” Emily Powell said. “You walk into a Borders or a Barnes & Noble ... what is there is what you get.... You and I were led to believe our tastes needed to fit within that realm as well.”

Borders and Barnes & Noble say they offer a large selection, which is often tailored store by store to meet that neighborhood’s wants.

Michael Powell said he sees technology, overseas and non-English books as areas to grow. Daughter Emily agrees but said it’s too early to talk about where she might take the company. She’ll develop her strategy over the next six years, with the help of family business consultants.

She’s already worked in the online division and then moved to used books, two areas crucial to the store’s success and where the other current senior managers lacked experience.

Emily Powell said she recognizes what she is stepping into. The company has become more than a company -- it is a biblio-mecca of sorts.

Its fiercely loyal customers are so entranced with Powell’s that some couples started their lives together there (they’ve held a number of weddings) and two people have chosen to spend eternity there. One’s ashes are encapsulated within a store pillar and another’s were mixed into the floor concrete when it was poured.

The store is internationally known. Powell’s sent one of the first shipments of commercial goods to Vietnam after the end of the war, $50,000 worth of books. It is currently working with a Saudi prince to develop a library in that nation.

About 10 years ago, the company shipped an entire cargo freight container of one title -- the Sears, Roebuck & Co. Wish Book catalog -- to China. The buyer was interested in promoting capitalism by showing people images of the variety of goods it could offer.

“My goal is not to be visible. My goal is to be successful in getting books to readers,” Michael Powell said. “Every book has a potential reader, so the challenge is to find that linkage. Sometimes it takes more effort.... Sometimes there is only one reader.”

The owlish owner is outspoken on free speech and dedicated to providing a venue for some unknown authors. But this approach, characteristic of independent bookstores, hasn’t always paid off for others. A number of independent bookstores are closing because of pressure from larger competitors.

But some big retailers say it’s unfair to see the larger companies as pushing the smaller ones out. They note competition from many venues -- wholesalers, drugstores and other independents in addition to large retailers.

“I think it would be more accurate to describe the industry itself as more competitive than as a competition between big and little,” said Stephen Riggio, chief executive of Barnes & Noble. “The existence of any one additional bookstore or any one extra website is competition regardless of who it is owned by.”

Meanwhile, analysts expect to see continued sales growth from Borders, while Barnes & Noble and Amazon.com continue their healthy performance. Large companies have certain competitive advantages, including being able to borrow on better terms than independents.

Michael Powell calls the retailers “worthy competitors” but says the company will continue to rely on its combination of selection, dedication and innovation to move forward.

“I never had an end vision. I don’t have an end vision today,” Powell said. “What I had was a commitment to the process and the process is to let books find their right level of acceptance. And if that can be done with 4.5 million titles, great. If it takes 9 million titles, let’s get going.”