Best Sellers : Dave and Doug Dutton Took a Family Business, Pitted It Against the Mass-Market Chains, and Won. Dutton’s Books, in Three Locations, Is the Big Little Bookstore That Could.

DOUG AND DAVE DUTTON were literally at a crossroads. They’d spent the morning buying a private book collection and now, Doug’s 10-year-old Buick loaded down with boxes of books, they sat at a Sunset Boulevard corner and debated what to do. The practical thing would be to turn right to Laurel Canyon Boulevard, go back over the hill to North Hollywood and unload the boxes at Dutton’s Books, their namesake business and one of Southern California’s classic, rambling, bookstore-lovers’ bookstores. The speculative move would be to turn left and drive down to Lou Virgiel’s Brentwood Books, which was, according to a tip they’d heard just hours before, about to go out of business.

They hesitated. They turned left.

It was fall, 1984, and independent bookstores were in trouble all over Los Angeles, watching their always-slim profit margins shrink in the wake of the chain bookstore invasion. Two blocks from Brentwood Books, the brothers saw the writing on the wall--a banner on a storefront that read “Coming Soon--Crown Books.” That was the future of bookselling: One by one, idiosyncratic stores were being edged out by hundreds of homogeneous outlets whose personalities were defined by a central office somewhere outside Southern California. Lou Virgiel was about to bid farewell to a personal bookselling past that spanned more than 20 years. He’d ordered a banner, too, one that announced his going-out-of-business sale.

But he wasn’t going to hang it up for four days. Brentwood Books was officially still in business.

Dave Dutton turned to his younger brother. “Let’s take them on,” he said. “It’ll be a challenge.”

THE CHALLENGE turned out to be more of a pitched battle for one of the largest book markets in the country, with B. Dalton Booksellers, Crown Books and Waldenbooks on one side and the general-interest independents on the other. Customers spent $6.2 billion in bookstores last year, and the Department of Commerce estimates that about $340 million was spent in the Los Angeles-Long Beach area and $70 million in San Diego--second only to New York-New Jersey, and the top market for a predominantly West Coast chain such as Crown.

The book business is essentially conducted in two wildly disparate ways. General-interest independent stores have traditionally believed that people will pay full price for variety: They offer a vast range of titles to lure customers into a store, and count on loyalty to a local small business to keep them coming back. Dutton’s in North Hollywood, for example, boasts about 100,000 titles, with discounts on selected new books. At the American Booksellers Assn. convention in Anaheim this weekend, most of the 5,500 booksellers will be independents, strolling the aisles to order inventory from more than 800 publishers, from the giants to the small local presses.

The chain bookstores go at it from a different angle. They offer a narrow inventory at deeply discounted prices. According to Crown’s president, Robert Haft, the average number of titles at a Southern California Crown Books is 6,000--which he can sell more cheaply than an independent can because he pays less for each copy of a new hard-cover on his high-volume orders. The chains practice low-risk retailing; their efficient display of high-demand items makes them the fast-food restaurants of the book world. Since they emphasize the likely hits, they don’t have to do as much shopping for titles. Waldenbooks dropped out of the ABA last year, and B. Dalton recently announced that it would no longer do business with small presses whose annual volume with the chain is under $100,000.

The chains can afford to play hard-to-get. They have exploited the Southern California market with great success--the three major chains now have about 200 outlets in the area, their largest concentration nationwide. Many independents, caught in a retailing bind that precludes raising prices to cover rising operating expenses, have found it difficult to fight back. “Most industries work on a markup,” says Ginger Curwen, editor of American Bookseller magazine. “The greengrocer can mark up the radicchio to cover his costs, but what can the bookseller do to absorb his increases? Mark up the books?”

Hardly. The likelier scenario has the independent going out of business. The casualty list includes some of the area’s best-known bookstores--Westwood Book Store and Papa Bach’s in West Los Angeles, Hunter’s in Beverly Hills, George Sand in West Hollywood, Butler’s Book Center in Marina del Rey--all done in by a deadly combination of more competition, lower profits and higher costs. Doug Dutton is haunted by a story he heard about a store that folded in the face of a tenfold rent increase. “What kind of business--aside from cocaine--can make that kind of money?” he asks. “A bookstore needs time to sit, and grow, and become part of the community.”

AFTER 18 years in business, Dutton’s in North Hollywood had the dubious distinction of being the first independent in Southern California to have a chain-store neighbor. In 1979, B. Dalton moved into a shopping mall just a mile from the store, and a year later one of the first Crown outlets appeared a mile in the opposite direction. Suddenly, the sound of customers’ footsteps was replaced by the sound of cars whizzing by, as people headed for big books at discount prices. The Duttons watched as the bottom fell out of their best-seller fiction business, which had accounted for about 25% of their sales, and saw their annual 8% to 12% gross increase per year dwindle to nothing.

The brothers were frightened--there were “plenty of sleepless nights,” Dave remembers--but they were not about to surrender. The family honor was at stake. Dave and Doug had been raised to believe that the best place in the world to be was a bookstore. In 1961, William and Thelma Dutton had sunk their life savings into a storefront on Laurel Canyon Boulevard in North Hollywood and opened Dutton’s Books. At first, William kept his job with a brassiere manufacturer to guarantee a steady income, while his wife, his eldest son and partner, Dave, and daughter-in-law, Judy, ran the store. Doug Dutton, then 12, remembers “being the equivalent of the kid in the Chinese restaurant who runs around filling water glasses.”

Over the years, the store grew to double its original size and William was able to quit his other job. When he retired in 1975, Dave took control of what was, by then, a Los Angeles landmark--a huge warehouse of a store, what Dave called a “cultural museum” that attracted browsers with its range of new titles, used books, first editions, and a unique selection of university press titles.

The question was how to defend it against the discount stores. The brothers knew they could no longer depend on the Big Book to buy them the luxury of offering a number of books that had smaller potential readerships. But if they lowered all their prices to competitive levels, they might not make enough to keep going. Tentatively they decided to lower prices on all new fiction, figuring that the bargain would tempt customers who wouldn’t mind paying full price for titles they couldn’t find at the chains. Then they waited and, according to Dave’s wife, Judy, “did a lot of praying.” She tried to calm her husband and brother-in-law down by predicting that books, like shoes, furniture and clothes, could survive a two-tier retail system--discounts on basic items for money-minded customers and quality, full-price merchandise for others.

IN THEIR case, she turned out to be right. By 1984, Dutton’s North Hollywood was in good, if not robust, health. Some customers were gone forever, but enough of them had returned, drawn by the store’s extensive inventory, to guarantee that it would stay in business. Although sales rose more slowly than they used to, the numbers stayed on the healthy side of zero. Dutton’s could be considered a success.

Brentwood Books was not so lucky; it sat on the brink of extinction. Prudent men would have offered Lou Virgiel their condolences and gotten back in the book-laden car--but “practicality,” says Doug in retrospect, “has never stopped us from anything we’ve done when it comes to books.” The store was a stereotypical small bookstore, one overstocked, underlit room, and it was love at first sight. By the end of the afternoon--emboldened by the stability of Dutton’s, eager for a project that Doug could oversee and tempted by what Doug calls an “amenable arrangement” that stretched payments over a few years’ time--the brothers owned another bookstore. Now all they had to do was reinvent it, to make it work.

Their theory was that the way around the chains was to do everything a good independent bookstore ever did, only more so. The chains had better prices. The Duttons were determined to have better everything else. They were going after the intellectual grazers, people who wanted to fill their plates at a buffet full of ideas and who would pay for the privilege. They believed--and for financial survival they had to be right--that there were enough of those customers to revive the Brentwood store.

They immediately started bringing in stacks of new books from North Hollywood, which blocked the aisles while they added 120 feet of new shelf space and built extensions onto existing shelves. Then, over time, they weeded out the books a customer could find at a chain store, making room for a wider assortment of their kind of titles.

Publishers’ representatives found the Duttons a tough sell because they wouldn’t buy the party line. They’d always ordered cautiously, and in small increments, at the North Hollywood store because they didn’t have enough room or enough money to place a whopping order on a single title. Now, with a wobbly new store, they became even stingier with their shelf space. They perused the publisher’s list, and then obstinately refused to order the obvious choices.

“Before Crown,” Doug says, “our initial order for a Stephen King novel would be 25 copies, and then you’d talk about maybe requesting another 25 two weeks later.” For “Misery,” King’s latest blockbuster, Doug stocked only three copies--and correctly, since he sold only one.

“It was no longer enough to be a great book person,” Doug says. “I know a lot of great book people who weren’t so great when it came to business, and they went out of business. To get by, you had to be a smart businessperson.”

If a book was a commercial and critical success, such as Tom Wolfe’s “Bonfire of the Vanities,” they’d grit their teeth and mark it down, taking a smaller profit percentage than the chains did, so that they wouldn’t lose their regular customers. But they staked their future on the books they stocked that the chains didn’t carry, books that would, as Doug puts it, “become our best sellers.”

He and Dave had always believed in the power of the passionate recommendation; they had been inventing markets for books long before the chains arrived in town. In 1976, Doug, a rabid reader of new fiction, got his hands on an early copy of John Irving’s “The World According to Garp,” which was not yet receiving much of a push from its publisher. Judy Dutton recalls that “the publisher was selling threes, fours and fives at first,” small orders, while Doug touted the book to everyone who walked into the North Hollywood store.

“It was a matter of saying, ‘Read this book,’ of putting it in the hands of every single person who walked into the store,” he says. “I didn’t know Irving; wasn’t a fan. I just happened to pick it up and, boy, that was it. I told everybody. I’d meet a woman I knew in Gelson’s supermarket and start telling her about it.”

The rest of the reading world would eventually make the book a national best seller, but not before Dutton’s sold about 230 early copies. To this day, the brothers continue to serve as advance men for their customers: Doug devours new fiction, while Dave and Judy stress fiction present and past, believing, as Judy says, that “a really good book is a permanent purchase.”

“We tend to sell critically praised novels, serious histories, things that make the front page of the Los Angeles Times or the New York Times book reviews, even if they don’t make the best-seller list,” says Doug. The chains, in contrast, do well with life-style books, commercial fiction, popular psychology. (“If I were ever going to write a book to sell in Los Angeles,” says one chain employee, “I’d call it ‘The New Age Beverly Hills Diet.’ ”)

The two brothers informally split up their responsibilities, with Dave maintaining the North Hollywood store and Doug plotting the rebirth of Brentwood Books--an arrangement that would be formalized in 1986, when they each took sole ownership of their respective stores. That allowed Dave to preserve the North Hollywood store as his father had created it, welcoming anyone who pulled up at the curb with a trunk full of interesting old books, while Doug began an ambitious rehabilitation project that continues to this day.

DOSIER HAMMOND, manager of the UCLA Bookstore, says the brothers sell “the glory of clutter.” Dave Dutton, now 51, surveys his North Hollywood store as if he were the luckiest man on earth, surrounded by books, books piled to the ceiling and stuffed under counters, books stacked at implausible angles like shifting geological plates, books crammed into the tiny office. “That store,” says Hammond, “tends to rain and explode books from time to time.”

The Brentwood store, under Doug’s care, is more organized but not much more spacious, and it is still properly overrun with books. “A shelf on Italian history,” he says proudly. “Not just a couple of titles. A shelf.” He has taken over two more storefronts in his Brentwood courtyard to house his expanding inventory, which he estimates at 75,000 titles and still growing.

But sheer volume does not guarantee success. “You can be overwhelmed by too much choice,” says American Bookseller editor Curwen. “It’s incumbent on the retailer to do some editing for the consumer.”

Perhaps the most significant improvement in Brentwood is the staff, which leads potential customers into temptation. If the chains were vulnerable to competition in terms of inventory, Doug Dutton felt that they also left something to be desired when it came to service. He wagered that rapport might be a luxury for which people would pay an extra $4 or $5 per book, so he hired salespeople who are devoted readers and eager tour guides.

Each one reads, recommends--as Doug did with “Garp”--and contributes brief reviews to a new store newsletter. Customers respond with reciprocal enthusiasm. Singer-composer Randy Newman, who has been known to take a stack of Dutton’s inventory along on concert dates, will drop in for no reason beyond wanting to see what new titles are in, and what the resident staff expert on a given topic will have to say. “What I like to do best in the world,” he says, “is just go in there and look for books.” A Century City lawyer who’s too busy to browse simply calls when she has to go out of town on business and needs something to read. Dutton’s sends her an assortment based on her tastes, “like a candy store putting together an Easter basket,” says Doug.

He has developed a new generation of regular customers, and his investment--in expansion, and in a well-paid, well-versed staff--has paid off. In 1987, bookstores averaged a 10.7% increase in sales. The North Hollywood store did better than that, and Doug Dutton almost doubled his Brentwood gross sales.

AT 10 A.M. on a weekday morning, Dutton’s Brentwood Books hardly looks like the post-chain picture of health. Clerks outnumber customers--Lise Friedman, recently made a partner in the store, has time to play with her baby daughter and make a daily snack run to a nearby market, while Scott Wannberg makes up a new window display and Ed Conklin checks in a UPS delivery. Doug Dutton chats with a publisher’s representative, stopping just long enough to recommend a new book to a customer.

The only clue to the store’s success is the telephone, which never stops ringing, and the three shelves of special-order books, which are crammed full. Dutton’s has its share of browsers, but it also functions as something of a retail card catalogue: People are constantly calling to ask about books they’ve seen reviewed or to ask for titles on a particular subject; the calls lead to so much business that Doug recently had another phone line put in. One clerk considers it with some ambivalence. She can give people better service now, but she never gets to stray more than a phone cord’s length away.

And Doug does have his ways of packing the store. This morning may be quiet, but Friedman is methodically sticking a roll of mailing labels onto postcard invitations for an upcoming author’s party. Almost every weekend, Dutton’s fills with people clicking plastic wineglasses, buying autographed copies of a new book--and, more often than not, coming away with a couple of extra books in the process.

These days, Doug and Dave tend to be low-key about their success, making sanguine references to peaceful co-existence with their chain-store neighbors. “We send them customers and they send us customers,” Dave says magnanimously. But among relieved, still-wary staff members, a certain amount of chain-bashing goes on. There is always the introductory apology (“I know I’m being elitist, but . . .”) followed by a biting comment about bookstores that don’t know their books.

“I heard a wonderful story about Crown,” says Lise Friedman, as if she had just been informed that enemy soldiers had no bullets in their guns. “Someone asked to see their ‘Books in Print,’ ” an essential directory that lists books according to title, subject and author, “and the clerk didn’t know what it was. “

But the brothers are perfectly content to let the chains do what they do well. Doug and Dave have admittedly had their share of good luck, in the form of reasonable landlords, manageable rents and free parking, and they do good business. They’ve never really wanted more than that.

“We sell enough to pay the rent, pay the expenses, buy more books and keep it going,” says Doug. “It’s never been a business where you make big money when you’re in it.” He’s heard stories about bookstore owners who make a nice profit when they sell out, but that isn’t his plan. “I intend,” he says, “to be an old man with a bookstore.”

Or perhaps two. Both brothers are expanding again, happy victims of what Doug calls “the family disease, which the genealogists have traced back to North Hollywood.” He has just taken over another space in his courtyard and when he’s feeling optimistic, which is often, contemplates opening another store on the Westside. Dave has opened a store in the Arco Plaza downtown, under the management of his daughter, Juliet. Not only have the Duttons survived the onslaught, they have prevailed. It may not be possible to slay Goliath--but this David, and Doug, dozens of book-crazed employees and loyal customers, seem to have fought him to a draw.