Content Crossroads & Distribution Junction

Just how many Waldenbooks stores will close this year is still uncertain.

“At this stage, I don’t want to predict how many we’ll close, but we were on a path to close around 80 anyway, and it will be at least that many,” said Ed Wilhelm, senior vice president, CFO of Borders Group.

There seems to be an increased focus at superstores like Borders and Barnes & Noble in remodeling and adding products to their cafés and stationary/gift sections. “The cafés, and gifts and stationary departments are the two highest-gross-margin categories that we have in the stores,” Wilhelm said.

This combined with the closing of mall stores like Waldenbooks ultimately will leave less shelf space out there for books, driving publishers to look for alternative forms of distribution.

Despite this, over the past few years, book sales have been steadily climbing. In 2002, estimated U.S. book publishing industry net sales were $22.1 billion, increasing 4.8 percent in 2003 to $23.1 billion, according to the Association of American Publishers. From 2003 to 2004 the industry experienced a slight drop, down 1.3 percent to $22.8 billion. However, net sales for the industry are estimated to have increased by 9.9 percent from 2004 to 2005 to a grand total of $25.1 billion in 2005.

At Barnes & Noble, total store sales in 2005 increased 5 percent to $439.7 million, compared to 2004. For the same period, total store sales at domestic Borders Superstores increased by 4.7 percent ending 2005 at $2.71 billion. It is important to note that these figures include total products sold including gift, stationary, music and café sales.

Examine the Growth

When the BISG published its report “Book Industry Trends 2006,” it represented a major step forward in the process of quantifying the U.S. book publishing industry because for the first time the study included companies with sales of less than $50 million, according to Healy. “This segment of our industry, which is both large and growing, had been under-represented in all statistical compilations until this year,” Healy says. He believes there are reasons to be confident that we will see continued growth going forward.