Tracking 20 Years of Bookstore Chains

The bookstore chain landscape has undergone seismic shifts over the past 20 years and will enter the fall with approximately 1,100 fewer stores than dotted the country in 1991. Just as it is today, Barnes & Noble was the country's largest bookstore chain 20 years ago, closely trailed by Waldenbooks. Unlike today, though, there were a number of regional chains that tried to compete with the powerhouses.

The largest regional was Crown Books, which at its height had sales of $305 million. Founded by Robert Haft in 1977, Crown closed in 2001 after two trips to Chapter 11 and much turmoil within the Haft family. Crown clustered its stores in major cities around the country and just before it closed its doors for the final time, sold 19 outlets in metropolitan Chicago and Washington, D.C., to Books-A-Million. At present, BAM has one store in Chicago and nine in the greater Washington area. Now the de facto second largest chain by revenue, Books-A-Million was known as Bookland in 1991 when it was the sixth largest chain and its outlets operated under the Books-A-Million, Gateway, and Bookland names.

Chicago was also home to Kroch’s & Brentano’s, an area institution that at its peak had 22 bookstores in the region, but closed in 1995 a victim of intense superstore competition in the Windy City.

A third significant regional chain in 1991 that eventually went bankrupt was Lauriat’s. The seventh largest bookstore chain in 1991, the New England–based Lauriat’s acquired its slightly larger competitor Encore Books in 1994. Danny Gurr, a former president of Lauriat’s, noted that Lauriat’s was profitable up until one year before it was forced to close. The chain leveraged its costs by opening new stores and through its Encore acquisition. The issue that eventually caught up to Lauriat’s was the inability to keep up with its debt service, something Gurr attributed mainly to pressure from the superstores and the deep selection they offered. “It was a race to have the most titles,” Gurr said, something that made it impossible to give a worthwhile return on investment to investors. And in a scenario that still sounds familiar, Gurr said Lauriat’s was not helped by publishers, who cut the retailer’s credit as it struggled to survive. “Publishers can be their own worst enemies” when it comes to supporting retailers, Gurr observed.

Given all the new difficulties facing booksellers, Gurr, who is a director of Hastings Entertainment, believes it would be all but impossible for a new regional bookstore chain to emerge following the Borders collapse. Noting that Lauriat’s neighborhood bookstores were outperforming the mall stores when the retailer closed, Gurr said that bookstores with strong community ties and low overhead can still succeed, but that the concept of operating multiple locations isn’t feasible.

While the general trade bookstore chains have faded since 1991, the two largest religious bookstore chains in 1991 have added outlets over the 20-year period, although both are down from their highs in the first part of the previous decade. Zondervan Bookstores was sold by parent company HarperCollins in 1993 to private investors as part of a management buyout. From 126 stores in 1991, the renamed Family Christian Stores reached a high of 355 outlets in 2001, through a combination of acquisitions and internal expansion, before scaling back operations to 283. It plans to open two stores this fall.

The Cokesbury chain, headquartered in Nashville, Tenn., is owned by the United Methodist Church and is a self-supporting nonprofit entity. There are currently 57 stores in 26 states and the District of Columbia, down from a peak of 76 in the early 1990s. Sources at Cokesbury note that as more business has moved online, there have been declining sales in its bricks–and-mortar stores, which led to store closings.

The Early Borders

Although it only had 13 stores in 1991, Borders had sales of $82 million, making it the fourth largest chain in terms of revenue as it pioneered the superstore concept. Its operating income of $6 million also made it among the most profitable bookstore chains at the time. It was acquired by Waldenbooks, itself owned by Kmart, in 1992 to jump-start Walden’s superstore expansion. After Kmart merged Walden and Borders, the bookstore chain was spun off as its own company and will disappear this fall.

Leading U.S. Bookstore Chains