PORTLAND, Ore. -- Assaulted by chain stores and cyberspace, independent
bookstores throughout the U.S. may seem headed for their last chapter.
Not if Michael Powell has anything to do with it.
Mr. Powell, owner of closely held Powell's Books, has mapped out
a plan not only to compete with chain stores in sheer size, but also to
build a small, but solid, niche in the online book world now dominated by
Amazon.com Inc. and Barnes & Noble Inc.
At a time when many smaller independent bookstores are closing, Mr.
Powell is building a 30,000-square-foot addition to his main store in
downtown Portland, Ore., and mounting an all-out campaign to make his Web
address (www.powells.com) as well known as Amazon's (www.amazon.com). He is
backed by an inventory of more than one million new, used and out-of-print
volumes packed into a store that dwarfs the giant stores being built by
Barnes &
Noble and Borders Group Inc.
"With all the pressure bookstores are receiving from Barnes & Noble and
others, if we are to see our sales increase and achieve our goals, we need
to be successful on the Web," said Mr. Powell, clad in jeans and a
collarless shirt as he prepared for a trip into his warehouse recently.
Different Strategy
While Amazon, Borders Group and Barnes & Noble sell mostly new books,
Powell's Books' inventory is dominated by used and out-of-print books, a
specialty Mr. Powell hopes will mark him a solid place in the online
bookshelf.
"It's a different strategy relying on used and out-of-print books because
we can't compete with Amazon and Barnes & Noble on new books," Mr. Powell
said.
Len Vlahos, spokesman for the American Booksellers Association, an
association of independent book dealers in New York, said other new and used
bookstores have a presence on the Web, "but Powell's seems to be one of the
most aggressive independents in that arena."
Anthony Blenk, an analyst who follows Amazon.com for Everen Securities
Inc., said he believes there will be a niche for used and out-of-print
books on the Web.
"Amazon has a pretty strong brand name and more than three million
customers," Mr. Blenk said. "The question for Powell's is how do they come
in and really compete and get adequate exposure."
Supplier to Amazon
Indeed, a key part of Powell's strategy is to not only supply used books
himself, but to be a primary source of used books for Seattle-based Amazon
and, perhaps, other large on-line companies. Powell's Books already
provides that service for Amazon.com, which lets customers order used books
if what they request isn't available from a publisher.
Kay Dangaard, Amazon.com's media relations director, said Amazon has a
network of bookshops that supplies used and out-of-print books. Dangaard
said while she can't reveal exactly how much business Amazon.com does with
Powell's Books, "very definitely Powell's is an important source of used and
out-of-print books for us."
Although Mr. Powell does sell some new books, he said he doesn't view his
cooperation with Amazon.com as fueling his competition.
"We see more opportunities than disadvantages," Mr. Powell said. "Amazon
will be a big company with or without us. Their contribution to us could be
significant."
Powell's Books is a Pacific Northwest institution that has earned a
national and international reputation.
'Innovative and Creative'
"They are just one of the finest operations in the country, the most
innovative and creative," said Joyce Meskis, owner of Denver's Tattered
Cover, a large independent bookstore that sells new books in 85,000 square
feet of space, in addition to an online address.
"Certainly Powell's has had a national reputation for years," said Helen
Kelly, owner of the Boston Book Co. and Boston Book Annex, a large used and
antiquarian bookstore in Cambridge, Mass. "I can't think of anything like
it."
Mr. Powell got into the Chicago book business in the early 1970s before
joining his father in business in Portland in 1981. The main downtown store
which has grown to encompass an entire block, has so many books on several
levels that there is a free, color-coded map at store entrances to guide
the overwhelmed.
Towering shelves hold new and used books on topics ranging from aardvarks
to zoology. Powell's Books' technical books section grew so large it now
occupies a separate nearby building. Powell's Books also operates several
specialty bookstores in the greater Portland area, including one devoted to
travel and another to gardening and cooking.
Adding Books, Square Feet
Mr. Powell is adding 30,000 square feet of space to his main
store, as well as constructing a building across the street. The new
building will house his growing Internet sales operation, which now operates
from dim, cramped quarters on the first floor of a building a block from
the main store.
There, on a recent morning, employees took phone and on-line orders,
while others packed up such used books as a 12-volume set of Abraham
Lincoln's works and a biography of Ambrose Bierce for shipment around the
world.
Mr. Powell said he has been using the Internet for book sales since 1993.
In the last two years, he has put his entire inventory on the Web. Mr.
Powell declined to say what portion of total sales are online, but he said
his Web-related sales are about $3 million a year.
To stock his ever-expanding operation, Mr. Powell relies on a team of
experienced book buyers who travel the country seeking collections,
libraries and even entire bookstores.
"We need, in order to broaden our inventory, to broaden our buying," Mr.
Powell said. "My ambition is to have buyers all over the U.S. and the
world."
Although Mr. Powell said he has considered going public, he believes Wall
Street focuses too much on short-term results.
Mr. Powell's face relaxes when he talks about books themselves. He still
does some buying himself, when he has the time, and recalls with relish
his excitement at discovering a true first edition of Melville's Moby
Dick -printed in London under the name The White Whale before it was
published in America.
It is this excitement about books that Mr. Powell hopes will ensure the
survival of bookstores in the online age.
"It's a bit of a gamble," Mr. Powell said. "You have to have a comfort
level people will continue to be interested in browsing in bookstores.
While people who order on-line know what they want, browsing is still
important."
