As Bad As It Gets?

Total sales for the nation's three largest bookstore chains fell 6.3% for the quarter ended November 1, with revenue falling to $1.93 billion. For the first nine months of the year, total sales were down 3.6%, and there is a strong chance that, for the first time since Barnes & Noble, Borders and Books-A-Million came to dominate the bookstore market, total sales for the three companies will fall for the full year. All three chains blamed a decline in customer traffic for the drop in sales, with sales particularly slow in September and October. Booksellers are certainly not alone in reporting declining retail sales. Last Wednesday, the Commerce Department reported that consumer spending fell by 1% in October, the biggest decline since the September 11 terrorist attacks.

Borders had the largest drop in the period among the three chains, with sales off 9.4%, and it also suffered the largest decline in same-store sales—comp sales at its domestic superstores fell 12.8% and declined 7.7% at its Waldenbooks specialty group. Comp sales at Barnes & Noble fell 7.4% in the quarter, and dropped 9.9% at Books-A-Million. Borders CEO George Jones said the steeper decline at Borders was due to the company's aggressive inventory reduction program. “It cost us some sales,” Jones said, “but it was the right thing to do. We were buying way too much product.” He added that Borders is now “fine tuning” the inventory program and has a team going store by store to restore any titles that may have mistakenly been removed. Jones, like the heads of the other chains, said Borders is “well stocked” for the holidays. While no one was predicting any meaningful improvement in the fourth quarter, all executives were hoping books will be seen as inexpensive gifts for the holidays. BAM CEO Sandy Cochran also noted that the publishing slate, especially for fiction, is much stronger than a year ago.