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Powell's Books Plans to Thrive
Both in Stores and on the Web

by Paula L. Stepankowsky
Dow Jones Newswires
The Wall Street Journal, September 21, 1998

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 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 ( as well known as Amazon's ( 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 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, which lets customers order used books if what they request isn't available from a publisher.

Kay Dangaard,'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 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 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."

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