The Chains Close the Door on Malls

When Waldenbooks and Dalton began their expansion into the bookselling business more than 30 years ago, they spread small-format stores to malls across the country. But with the rise of the more than 25,000-sq.-ft. superstores, some of which are in malls, the smaller mall-based stores gradually fell out of favor, and come next January the country's two dominant booksellers will operate only 130 outlets, all by Walden parent Borders. Third-place Books-A-Million had 37 Bookland mall stores as of January 2001, a number that fell to 20 in January 2009.

Barnes & Noble, which acquired Dalton in 1987, began shutting down its mall stores before Borders and closed 915 outlets between 1989 and January 2009. Borders saw the mall stores as an important source of cash flow, and operated 869 mall stores as recently as 2001. But as the mall business deteriorated, Borders too decided it needed to limit its exposure in the malls; when former CEO George Jones took over earlier this decade, the company began to accelerate its mall closings. As a result, revenue from the mall stores fell from $1.32 billion in the fiscal year ended January 2001 to $547 million in January 2009 and will likely be half of that when sales for the fiscal year ended January 2010 are reported. B&N described its approach to exiting the mall business as a “controlled descent” that was being undertaken “in response to declining sales attributable primarily to superstore competition.”