Chain Reaction : As Mega-Bookstores Move Into Their Neighborhoods, Independents Worry About the Future

She survived the recession, painful rent increases and the wrecker’s ball. For years, Penny Davies has scrambled to keep her bookstore operating in downtown Santa Barbara. But now, she may have met her match.

Last month, a new neighbor moved in down the block. A competitor with plenty of cash and influential friends in the publishing world. Someone who might crush Davies’ business and laugh all the way to the bank.

It was a super-store--the latest trend in mass-market bookselling and either a blessing or a curse, depending on whom you talk to. Seemingly overnight, a huge, wood-paneled Barnes and Noble shop was competing with Davies’ Earthling Books. The neighborhood now has two bookstores, each with more than 100,000 titles, plus espresso bars, cafe dining, in-store music and literary readings.

An embarrassment of riches for book nuts. But Davies sees it differently.

“I worked hard to build this store up,” she says, angrily. “And suddenly this predator moves in. Why would Barnes and Noble pick this street if not to take our business away? We had the market covered. And now we’re in a war.”

You’ll hear the same complaint these days in many independent bookstores across America. After years of preeminence in their markets, folks like Davies are suddenly competing with super-stores that undercut them on prices and are significantly larger than any mall outlet. It’s a Darwinian shakedown that has rocked the book world to its core and could transform the face of U.S. publishing.

Indeed, the diversity of American books may hang in the balance. For decades, independent stores have prided themselves on nurturing unknown books and writers that large chains often ignore. In some cases, these neighborhood stores are the only route to mass acceptance for titles that initially had no chance in the chain stores, such as the current best-selling “Bridges of Madison County.”

Now, some booksellers argue that if independents die out, a handful of corporate buyers in New York could dictate virtually all of the books that are sold. Already, the power of mega-chains to influence publishing decisions is well known. The book world is rife with stories of publishers asking bookstore executives for advice on which books to acquire and even how they should be written or changed. It’s a growing concern, but some experts believe the die is cast.

“I sympathize with the complaints of the smaller stores, yet the move toward mass retailing in books is irreversible,” says publisher Steven Schragis of Carol Publishing Group. “There’s a lot of resentment about this, but it’s the kind of anger that a neighborhood video store has for a new Blockbuster Video outfit. It seems unfair, but it’s a fact of life.”

Santa Barbara is a case in point. Since Davies bought Earthling Books in 1974, the store has been an active member of the downtown community. When the city’s redevelopment agency threatened to knock it down, a petition drive put the issue on a local ballot and voters opted to save the store. Davies has moved several times, to escape high rents and find more space. Through it all, her sales have grown.

By contrast, the Barnes and Noble behemoth seemed to drop out of the sky. Plans to lease the store in the shell of an old Miller’s Outpost were announced shortly after Davies’ store moved to its current location. It was part of a strategy by chain booksellers to tap healthy markets, often by locating their new emporiums close to successful independent bookstores.

So far, the gamble seems to be paying off. Last year, super-store sales reached $539 million, and operators predict healthy growth in the years ahead. Barnes and Noble led the field, with $328 million and 135 stores across America. Other chains jumping on the super-store bandwagon include Crown Books, Borders Books, Books-A-Million, Basset and Waterstone’s. Many of them are waging bitter wars for customers with independent bookstores and make no apologies for their presence.

“I’ve been selling books for 10 years, and I’m not a fly-by-night kind of person,” says Santa Barbara Barnes and Noble manager Garry Delson. “Obviously, there’s room out here for everybody, and we’re definitely not here to put anybody out of business. Our goal is to put books into people’s hands.”

“What’s wrong with any of this?” asks Tom Christopher, who runs the Barnes and Noble super-stores division. “We don’t target individual businesses or people. We go after markets. A Ford dealer can be next to a Chevy dealer. A McDonald’s can operate next to Burger King. It’s normal American competition.”

Probably even healthy for consumers, who have more shopping choices than ever. Yet the book wars taking place in Santa Barbara and other areas are not being fought on a level playing field, according to independent store owners.

They argue that the corporate chains have considerably deeper pockets than the smaller bookshops with which they’re competing. And there is concern that many neighborhood stores will be priced out of the market.

In Los Angeles, the problem is less severe because the city has fewer independent bookstores than other communities. Yet Dutton Books in Brentwood and other independent stores have felt some economic heat from nearby super-stores. Owner Doug Dutton says he isn’t worrying, at least not yet. But he and other local merchants concede that the potential threat is there.

“To the degree there’s worry, that’s understandable,” says Charles Robinson, who is president of the American Booksellers Assn. and owns a small bookstore in Bellingham, Wash. “It’s still premature to say what the impact will be. But if you’ve created a business over many years, and suddenly somebody opens a store right near you, you wonder if you’ll survive.”

If all this sounds familiar, it is. The trend toward huge-volume discount marketing has revolutionized consumer shopping, and companies like Price Club, Wal-Mart and Tower Records are putting many smaller firms out of business.

“We’ve recognized that there’s a much bigger market out there, and it’s a trend throughout the retailing world,” says Christopher. “All of this is a function of the market. And it also puts more books in people’s homes.”

During the 1980s, many independent booksellers felt they could survive whatever shake-ups rocked the publishing world. Most of the expansion in bookselling took place in malls, where large chains offered discounts and a comparatively limited stock of books. Independent bookstores held onto their share of the market by offering friendlier service, a more in-depth list of titles and a feeling they were part of the community.

All that changed when the first super-stores started appearing in 1990. Reflecting years of marketing research, the new book emporiums offered many of the in-store services that independents had pioneered, like lectures, live music performances and children’s reading programs. The battle was on.

Nowadays, it isn’t enough to offer a large stock of literary titles. Store owners have to provide ambience, complete with soft lighting, plush rugs, artsy murals, reading couches and a full calendar of weekly events. Many stores schedule pajama nights when employees read stories to youngsters while Mom and Dad browse for bestsellers.

None of this comes cheap, and many independent store owners continue to blame publishers for their problems. In Columbus, Ohio, bookseller Marie Rausch complains that large retailing companies get special breaks for high-volume purchases and offer bestsellers at prices that independents could never match.

In some communities, established stores have thrown in the towel. Guild Books in Chicago recently announced it was closing on June 1, largely because a super-store had opened nearby and was draining off a significant portion of its business. Although loyal customers tried to raise money and save the store--which featured progressive titles as well as a healthy literary stock--owner Lew Rosenbaum said it was no use.

“When a huge store opens up near you and starts undercutting your prices, what can you do?” he asks. “When you suddenly lose 10% of your business, it’s going to hurt.”

One of the nastiest wars is taking place on Manhattan’s upper West Side, where Shakespeare & Co. Booksellers is in a fight for its life with a Barnes and Noble super-store that opened one block away. The independent store has been a fixture in the neighborhood, where authors like Philip Roth take regular walks and artists like Isaac Stern pop up in ATM lines. It’s a bookseller’s paradise, yet some observers suggest Shakespeare’s days may be numbered.

In addition to Barnes and Noble’s discounts, which Shakespeare’s cannot match, the new super-store is wooing customers with free performances by Tom Paxton and Peter, Paul and Mary. A recent Op-Ed piece in the New York Times raised the question of “bookstore guilt,” asking whether customers should boycott the new bookstore out of loyalty or succumb to its charms.

Some suggest that everybody could come out a loser when the dust settles, because the book market is in danger of being over-saturated.

“I don’t know if all these big stores are going to be viable,” says Andy Ross, who owns Cody’s Books in Berkeley. “Every community is different, and bookstores are the means through which ideas are disseminated in our culture.

“I mean, we’re not selling heads of lettuce here. Anybody can open up a store and throw some literature in with the bestsellers. But becoming part of your community and plugging into people’s lives is another thing entirely.”

At Book Soup in West Hollywood, owner Glen Goldman speculates that the super-stores--all of them looking alike and stocked with virtually the same titles--might not establish neighborhood roots as easily as they think.

“What this style of retailing says is that there is a national consumer, of a particular stripe, and you can clone these stores with almost identical inventories,” he says. “But I don’t think that’s true or healthy.”

In Santa Barbara, Davies predicts that Earthling Books will survive the challenge from Barnes and Noble. Listen to the weekly calendar she’s drawing up: Tuesday is movie night, with classic films shown on a projector in front of the magazine section. Wednesday is travel night, where customers show slides of their recent trips. Thursday is opera night, with live performances. On Saturdays, there are children’s pantomime shows, and author’s readings take place on Sundays.

“We’re going to win,” she says. “For these big stores, it’s all dollars and cents. But for your neighborhood bookstore, it’s a matter of survival.”