Powell’s turns the page

The cash register at Powell’s City of Books, the nation’s preeminent independent bookstore, rings thousands of times a day as customers pick up new and used books, funky British editions, local literary journals and obscure zines.

It’s a scene that has repeated itself, with some variation of scale, many times since the store opened in 1971. Powell’s, which takes up a city block, has managed to thrive in this era of bookstore busts, thanks in part to a decision to move early and aggressively into online sales.

So why is there a creeping fear that Powell’s, which has five other locations and a 60,000-square-foot warehouse, could soon get lost? According to Forbes magazine, “a cloud hangs over the business.”

Michael Powell, 67, who founded the company and took over the main store from his father, Walter, a quarter-century ago, announced last year that he would gradually pass the operation to his 29-year-old daughter, whose business experience is limited. Although locals applauded the decision to keep the store in the family, it’s hard to ignore the fact that generational handoffs rarely go as planned.

“Businesses don’t transition very well,” Powell said. “Most of them fail.” But he didn’t think twice when his daughter, Emily, told him she wanted to come back to Portland and take over. “I didn’t have another option,” he said.

Some customers think Powell’s formula assures its future no matter what twists and turns the book business takes. To a certain kind of rabid reader, Powell’s is an almost perfect blend of the massive scale of a chain bookstore and the bohemian vibe of a neighborhood independent.

The mystery section includes popular fare and rare early editions, and is stocked by someone well-versed enough to recognize that William Irish was one of noir author Cornell Woolrich’s pen names. The staff is known for its bibliophilism: Jon Guetschow, 36, the store’s head buyer and a comics fanatic, says that he can’t afford to leave Powell’s because the loss of the employee discount would ruin him.

Between staff, stock and its online muscle, Powell’s looms over other beloved independent stores such as Denver’s Tattered Cover and New York City’s Strand.

But Powell, the man closest to the action, is not celebrating. He listed some of the things that have made the store noteworthy and successful -- the mix of new and used, the early Web presence, the symbiotic relationship with the city of Portland, with which he remains very involved -- and concluded: “That has carried us well to the moment. The moment is full of trepidation and uncertainty.”

Hunched protectively and built like a bull, he played nervously with a rubber band around a baseball he keeps at his desk and spoke into his chest.

“I’m at heart a pretty shy guy,” said Powell, who launched the first Powell’s in Chicago while a political science graduate student at the University of Chicago with a $3,000 loan that came from several faculty members, including Saul Bellow. “I’m not a glad-hander.” He is into noir novels set in other countries, and you can see his brooding temperament enjoying heroes such as Henning Mankell’s soulful detective or Alan Furst’s elegant, elusive spies.

But the challenges he faces are not fictional. His goal, he said, is to keep bookstores, and his in particular, “from being marginalized the way music stores have been marginalized.”

Powell’s has a head start on this one: The company started selling books online in 1994 -- before Amazon -- and ships millions of dollars of books, about 90% of them outside the Pacific Northwest, each year. (The company, privately held, does not release its financial data.)

“The key was identifying what the Web was going to mean and putting a lot of resources into it,” said Jim Milliot, business and news director at Publishers Weekly. “Recognizing that a neighborhood bookstore, to survive in the long term, needs to do more than sell books to people who walk in the front door.”

But the Internet has gone from being a clear winner for Powell’s to a source of apprehension. Powell described his business as being “flat,” and said he hoped there was a way to “reenergize” it but couldn’t imagine how. He’s getting it from both sides: Amazon has posted enormous gains this year, just as consumers have begun selling used books directly on the Web.

“The Internet has allowed anybody to become a used-book seller,” said John Mutter of the blog Shelf Awareness (shelf-awareness.com). “Go on EBay and set up an account. The sheer availability does press the prices down.”

New books present their own problem. Powell’s customers are charged “market price because we pay market wages, market benefits, market rents,” Powell said, but that puts the store at a disadvantage against chains and online outlets.

And union woes -- the staff has been unionized since 2000, a one-day strike took place in 2003, and a new contract has just met tentative approval -- have contributed to Powell’s weariness. “I won’t miss that,” he said.

But even with his days numbered -- Powell guesses he will scale back in 2010, when he turns 70 -- he is trying to find ways to stay ahead. In the spring, Powell’s released a short documentary on Ian McEwan and his recent novella, “On Chesil Beach,” which played at bookstore events in lieu of an author visit. A second film, created and co-produced by the company’s publicity head, Dave Weich, on late literary journalist David Halberstam, had its premiere last month in New York and will play at about 60 bookstores across the country this fall.

There are plans to make four films for 2008, though it’s not clear how this project will produce revenue. Mutter is impressed nonetheless: “They’re always trying new things. I don’t know where it will go, but it’s got a lot of potential.”

As for Powell, after he burrows out of his unease about the future, he is enthusiastic when discussing his daughter and the perspective she will offer. “It needs fresh eyes; it needs eyes conditioned by technology,” he said of the company. “It’s not intuitive to me.”

Emily Powell, a Haverford College urban-planning graduate, is as outgoing and optimistic as her father is internal and closed.

Still, for all her charm, when she returned in 2004 after a few years baking pastries and selling lingerie and commercial real estate in San Francisco, she suspected she would not be widely adored. “I thought everybody was going to hate me,” she said. “I’m the boss’ daughter; I have a silver spoon in my mouth.”

She has certainly been part of the picture for a long time. Some staff members remember her standing on phone books as a child to ring registers during the packed Christmas season. (The store is open 365 days a year.) One journalist recalled riding along with Michael Powell as he picked her up from horseback-riding lessons. She spent much of her childhood hanging around the store after school.

But she and her father have done what they can to keep her from coming off like a child of privilege.

These days, she keeps a small desk on the edge of a cavernous room -- the information-age version of a Manchester cotton mill. Next to her, a small army of employees stacks, sorts and labels books purchased from customers downstairs at a rate of about 3,000 a day, and register them for online sales. She calls the space “the guts of the store.”

Emily Powell, heir apparent to one of the book world’s biggest operations, doesn’t have an office of her own.

“What we do out here,” she said, gesturing to the churning chaos, “is much more instructive for me to be around, to be a part of. People don’t come into an office -- that’s a barrier between me and co-workers. This way I have to climb over books to see what we’re buying, what we’re discarding and what the flow is. Are we backed up? Do we not have enough inventory? I walk through this every day.”

This talk about open spaces and busting hierarchies has echoes of a 1990s dot-com cliche, but she has a point.

She and her father, who are following a plan masterminded by Oregon State University’s business school, are trying to beat the odds: About 30% of family-owned businesses make it to the second generation, 15% to the third.

In Hollywood terms, she’s starting in the mailroom.

On her return, she made the standard hourly wage in the company’s Internet department. She has worked in marketing and business development, and assisted with the establishment of a new 32,500-square-foot store, heavy on children’s books, in nearby Beaverton. Last year she became director of used books.

“If someone handed me a vice president position, I wouldn’t have known what to do with it,” she said.

And although she hesitates to come up with specific plans, she seems to know what the problem is: competition from Amazon and warehouse clubs; flat revenue on the Internet side and a lack of loyalty from people who order online; unknown technological changes that could involve downloadable books; and a general compression of the field.

“It’s been a rocky couple of years for the business,” she said. She expects a markedly different industry in five years.

“It’s probably as tense as it’s ever been,” Publishers Weekly’s Milliot said of the business climate. “The whole industry, from the publishers down to the bookstores, is uncertain where things are going to go. No one worries that the physical book is going to disappear. But they’re all fighting for a smaller slice of the pie.”

The trick, Emily Powell said, will be maintaining the culture of the store -- not just the bohemian tone but stocking books that are hard to find in other independent stores, such as conservative and Christian tomes, which her father insists are usually blind spots -- and preparing for the unknown.

Despite her lack of seasoning, industry observers are mostly heartened that the company will stay in the family, the best way to maintain Powell’s spirit. Milliot calls Emily Powell “a known quantity.”

“We’re in a very antiquated industry in many respects,” she said. “You have to like bookselling, not just books, in order to bring change.”

She mentioned her grandfather, a working-class jack-of-all-trades who never went to college.

“My grandfather wasn’t a book person; he saw an opportunity for a business. He didn’t know one author from another.”

Portland, with its comparatively low rents and rich pedestrian culture, has been a hospitable home to bookstores. (Indeed, in what may be a bittersweet footnote for many Los Angeles book buyers, the entire stocks of some of L.A.’s closed used bookstores -- Other Times on Pico Boulevard and Arnold Herr Bookseller on Fairfax Avenue -- have been shipped to Powell’s over the last two years.)”It’s hard to do business in an unhealthy city,” said Michael Powell, whose civic involvement has paid off. The city and company have clearly been good for each other.

Still, it’s impossible to know where the book business will be in 10 years. Observers said Powell’s track record, at least, inspired confidence.

“I do think independents have stabilized as a market force, and the sales figures back that up,” said Mutter of Shelf Awareness. “We do as many store-opening stories as store-closing stories, and the people in the industry seem to be smarter businesspeople than they were 20 or 30 years ago, when they said things like, ‘We just love books.’ ”

Said Milliot: “With their presence online, Powell’s is better prepared to meet those challenges than your typical independent. They’re going to have to stay on their toes, continue to innovate, to keep extending their brand. But of all the stores to worry about, Powell’s would be down on the list.”

scott.timberg@latimes.com