On Learning to Compete by the Book

Thursday here was one of those days that mocks the very concept of winter--bright sun, balmy breeze, sweet air. Beach-bound bicyclists pedaled down State Street in swimsuits, passing beneath Christmas banners of palm trees decorated with red ornaments. The carols piped through sidewalk P.A. systems, songs of sleigh rides and white Christmases seemed part of a community prank. It was, in short, one of those days that make Southern California immigrants remember precisely when they came here, and why.

“The blizzard of 1966,” Terry and Penny Davies said, almost in unison. He told of three days trapped inside a service station in Upstate New York. She spent the siege, snowbound, in a house without heat. They survived, shoveled out and moved the family to Santa Barbara. Eventually, they invested $6,000 in a tiny bookstore, the Earthling. Eventually, the little bookstore became a big bookstore.

It also became a downtown landmark, an unofficial community gathering place on a prime corner of State Street. In this way, the Davies’ bookstore joined ranks with those most romanticized of American enterprises--the independent, small business, the mainstays of Main Street, the shops where owners and customers might actually know each other by name.

“We actually got kind of lazy,” Penny Davies says now. “We were the only show in town.”

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Last spring things changed. In May, a newcomer came to State Street. Barnes & Noble, a national book chain, opened a “superstore” three blocks down from the Earthling. For the first time, the Davies knew the taste of fear that floats high in the throat of independent hardware dealers, and grocers, and pharmacists, and haberdashers, all across California, across America. The chains had arrived.

At first, they were cocky. Once before, in a fight with city bureaucrats, Santa Barbara residents had rallied around the Earthling to save it from the redevelopers’ wrecking ball. And after the Barnes & Noble arrived, and after the Davies started squawking about how unfair it seemed--forced to compete against a “predatory” national chain that, for a variety of reasons, could cut prices to a level certain to kill them--the community seemed to respond. There were calls for boycotts of Barnes & Noble, letters written to editors and all the rest.

Not everyone joined the cause. In the first three months after the Barnes & Noble opened, the Davies said, their proceeds tumbled. Community loyalty was one thing. A 40% discount on Rush Limbaugh’s new bestseller was another. Independents in other cities had warned the Davies. A recession was on and consumers were focused on the bottom dollar. Moreover, broad changes were at work across the economic landscape, and they did not bode well for those who stood in the way of the superstores and discount warehouses.

“The doomsayers told us there is nothing you can do,” Terry Davies said. “They said, ‘They did it to the record business. They did it to the electronic business. They did it to hardware. Now it is your turn.’ ”

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Of course, to suggest this might be wrong--to suggest, for example, that it’s unfair to allow big chain stores to blow into town and drive out the little stores--is to commit a sacrilege against the gospel of free, unfettered competition. Never mind agricultural subsidies and tax laws that underwrite the real estate industry. When it comes to the chains, retailers like the Davies are expected to fend for themselves.

And so, after their initial complaints, they settled down and set to work. They began to offer bestseller discounts of their own. They helped organize a national buying consortium with other independents, providing better leverage with publishers. They began to stage opera nights, singles nights, story hours, celebrity readings. They hired a controller. They opened an outdoor cafe. They got better--just as the free enterprisers would have predicted--and they now believe they will make it.

“We got our customers back,” Penny Davies said.

And along the way, Terry Davies added, they “have taken a lesson” from their competition. They already had a little shop in San Luis Obispo, and now they plan to turn it into a big shop. And they have cast their eyes on the Ojai market. Booksellers who currently operate in those towns might be wise to prepare themselves for battle. The Davies do grasp the irony of this, but business, as they say, is business.