Bob Hugo caught the bookselling bug back in 1965, a year after his brother David opened A Bunch of Grapes Bookstore on Martha's Vineyard. To get rid of excess stock when the island emptied out after Labor Day, David sent it to Bob, who used it to start the Spirit of '76 Bookstore in Marblehead, Mass. Other family members helped, too, including their mother, who kept the store open in the afternoons while Bob finished his senior year in college.
Since then, Hugo has added three more stores: the 29-year-old Book Rack in Newburyport, Mass., which he purchased in 1988; Water Street Bookstore in Exeter, N.H., which he started with Dan Chartrand in 1991; and the Andover Bookstore in Andover, Mass., the second oldest bookstore in the country, founded in 1809, which he acquired in 1992. All are direct descendents of what used to be known as "carriage trade" stores, and are located in the downtowns of small but thriving New England communities.
In addition to having different names, each of Hugo's stores has its own distinct personality. Andover, for instance, is the most upscale of the four, and looks out on a parking lot filled with Jaguars and BMWs. Once a barn, its three floors exude a warm, cozy atmosphere in part because of the centrally located fireplace. The store specializes in poetry and has an extensive events schedule. It's also the official school store for nearby Phillips Academy, and is the place to shop for sweatshirts, pens, bibs and other paraphernalia featuring the exclusive prep school's logo. Water Street is the newest store and has the strongest children's section, known as Time of Wonder, in a separate storefront just two doors down. Spirit of '76's specialties are seafaring titles and local histories, such as a photo-essay about Marblehead that Hugo helped fund, which has sold some 3,000 copies at that store alone in the past year. In look and feel, the Book Rack most closely resembles Spirit of '76, but with a more literary spin.
Four thriving locations—and 36 years of successfully weathering the bookselling wars—would be enough for most booksellers, but not for Hugo, whose license plate and new store signage emphasize his passion for BOOKS in large capital letters. Despite a few unsuccessful ventures along the way with David in places as far-flung as Florida and Alaska, Hugo is actively scouting a new location or two to add to his holdings. Nowadays, though, he makes sure that any store he buys is within easy driving of his Marblehead home. He also looks for community connections with his own family, such as the Book Rack's proximity to his daughter's boarding school. It makes it easier for him to pop in unannounced at least twice a week and check the inbox in his offices.
A trim man just over six feet tall, Hugo exudes a boyish charm that belies his full head of gray hair. Although he has reached a point in his life—the late '50s—when many booksellers start to think about getting out of the business, he has no plans to retire any time soon. The only thing that could drive him out, he told PW, is "print-on-demand. Lots of people got out when computers came. In three or four years, we may have a printing press. That's when I get out." Meanwhile, Hugo uses his spare time to look into a new computerized inventory system that would enable him to link all four stores, something his aging IBID system can't do, and a Web site. "I waited so I could learn from everyone else's mistakes," he said. The Andover site, which will be the first one up, should be ready early this fall.
As to how he's managed to succeed on Main Street when others have not, Hugo attributes his success to two things: controlling his location and controlling his stock. "In the survival of the independents, some part is based on keeping their own space," he noted. In the case of Spirit of '76, he bought the building back in 1976 after seeing a limo parked out front scouting his location in the center of Marblehead. Last year he and Chartrand purchased the Water Street building, and in August, he bought the Newburyport building. Andover, which is part of a shopping complex, is not for sale.
Earlier this year, Hugo got a reminder about the importance of owning your own location, when his landlord in Newburyport told him that KaBloom, a New England chain of flower stores, had made an offer to rent the Book Rack's space for more than what Hugo was paying. Hugo, who had been trying to buy the building for the past six years, persuaded the landlord to accept his offer. "Pay attention to your building," he advises bookselling newbies, "and keep close to the landlord's situation so you're first in line. A lot of us nailed down prime locations. We never thought about the pressures of a national [nonbook] chain wanting our space." On the flip side, he pointed out another advantage of owning real estate: "If the book business goes to hell in a hand basket, I have something to rent. It's that unforeseen thing that can come along."
Like other booksellers, Hugo works hard to compete with nontraditional retailers and online booksellers. "If you can't provide the services, you'll be gone," he stated, referring to customer expectations for fast delivery. While he no longer has to pick up stock directly by driving to three or four distributors every week, as he did when he first opened Spirit of '76—fast service from Koen, Ingram and others have taken care of that—he tries to handle all customer inquiries just as quickly. "You've only got a minute and a half to look up the book. I've got to be able to do it as fast as they could," he noted, referring to the speed at which a customer can check on a book at book reference Web sites. To speed up the process in his stores, he keeps two computers at each check-out counter/service desk: one is set to Baker & Taylor, the other to Ingram, and both are Web-connected. That way he and store staff can easily search the Oprah site, Abebooks or even Amazon to check on a book's availability. "For $2,500 a year times four stores, that's $10,000 I'm willing to spend so a customer doesn't go home and order from Amazon." Hugo said.
While each of Hugo's stores are distinct—each store buys individually within budgets that he sets—they do share a number of backroom functions, from insurance to budgeting and billing. Four years ago, Hugo hired a CFO/COO to computerize budgeting and billing systems for all four stores and make them mesh. "You don't want to be on hold," Hugo said. "You ought to have the new Clancy at 46% discount. My managers can't do their job if I don't have the bills paid." Nor is Hugo a believer in what he calls the "bingeing and purging" form of inventory control favored by some multi-store outlets. "We're not buying and returning all the time. People will learn if they have the right merchandise at the right discount, their gross won't go down."
In the last few years, instead of concentrating on New York Times bestsellers, or even Book Sense '76 titles, Hugo has begun to look at the books that sell two or more copies a week—the backbone of each store's inventory. "We focus on those books that are paying the rent," he explained. "We give them a special budget, like we used to do with the New York Times bestsellers list, and look at them every day. What we're trying to do is catch those books we thought we knew were selling." Even before it hit the bestseller lists, for example, Anita Diamant's The Red Tent was one of the 100 to 125 core books in each of Hugo's stores.
To have the right books at the right price in his stores means no discounting and no American Express—plus a careful mix of orders among distributors and publishers. Hugo's initial buys from publishers are either one or five copies, which gives him the flexibility and margins to carry the bestsellers as well as slower-moving poetry volumes. He doesn't believe in large beginning buys, no matter how persuasive the sales rep—or the author's track record. Instead he orders five for big books and one for titles that he knows he has a customer for. He described his system this way: "Let's say the reviews are bad and your exposure is five. You're not in for 36 and two dumps. Let's say you sell five, you call Bobby Koen and do half the reorders from the publisher at at least 46%. That takes watching your stock. Don't get threes, just ones, because you think it's a great book and you'll see how it goes. Better to have five Clancys and five Red Tents."
Going forward, Hugo plans to continue to sell books—and pay the mortgage—for many years to come. "There are plenty of mom-and-pop stores that aren't profitable. We all have a love affair with books," he said, "but I have to subsidize myself through the cash register. I think you can do both—have the autograph parties that don't pay off and turn a profit." If 36 years of bookselling is any indication, he's got the inventory, location and service to show that bookselling can pay.
