Chains Have Bestseller Malaise

Even as Harry Potter and the Half-Blood Prince broke sales records last month, executives at the three major bookstore chains bemoaned that bestsellers continue to sell in fewer numbers than in previous years.

In a conference with analysts discussing second-quarter results, Barnes & Noble CEO Steve Riggio noted that while Potter performed according to expectations, sales of bestsellers were lower than in the same quarter in 2004, when The Da Vinci Code, The Five People You Meet in Heaven and My Life were racking up big numbers. Borders Group CFO Ed Wilhelm noted that, excluding Potter, sales of the top 50 titles in the most recent quarter were below the comparable period in 2004, when Da Vinci and other Dan Brown titles were hot. Books-A-Million merchandising manager Terry Finley said the performance of bestsellers has been "somewhat disappointing," adding that BAM "isn't counting on that trend changing substantially."

Still, Half-Blood—which both Borders and B&N said sold in a more concentrated period than did Order of the Phoenix—helped boost sales at the top three chains by a total of 5.9% in the second quarter, to $2.19 billion. BAM had the biggest gain in the quarter, with revenue up 7.8%, to $122.4 million. B&N's 6.4% sales increase was helped by B&N.com's best performance in several years; the online unit had a 14% sales increase, to $96.3 million. The company attributed the improvement to higher customer traffic and a slightly higher average purchase per customer. Sales were hurt by a decline in the music segment. Borders's 4.9% sales increase reflected solid gains in the domestic book segment, somewhat offset by declines in music and a weaker-than-expected performance in its international group, where sales in the U.K. were soft due to a slowing economy following the London bombings.

Executives at all three chains were cautiously optimistic about prospects for the second half of 2005. Riggio was perhaps the most upbeat, citing a "great fall lineup" of titles. While Riggio didn't pick any sure-fire hits, among the books he has high hopes for are Eldest(for which B&N has more preorders for than any books this side of Potter); Billy Crystal's 700 Sundays; and some high-priced gifts books including The Complete Calvin & Hobbes, The Complete New Yorker and the Bob Dylan Scrapbook. All the execs also expect the December release of the film The Chronicles of Narnia: The Lion, the Witch and the Wardrobe to spark sales of related books.

Bookstore Chain Sales, 2004—2005
(in millions)