How the book trade is turning a page

Doris Mousdale opens Anthology in August, among the fashion labels and designer homeware of Teed St in Newmarket. Photo / Paul Estcourt

Doris Mousdale is taking the plunge.

No, that's not her Facebook status, it's her next move in a respected book trade career that includes top positions with Whitcoulls and Dymocks and a host of radio and television review programmes.

Made redundant from her role as retail business manager for Dymocks in April, she has decided to look the recession squarely in the eye and go it alone.

Her new bookstore - Anthology - is on track to open in August among the fashion labels and designer homewares of Newmarket's Teed St.

"I'm feeling quite confident about it," the book doyenne says. "I think the independent bookstore has a lot to offer the surrounding community. There are still people out there who want the next best read, and they want it recommended to them."

It's a statement that must be examined in the light of the closures of three Dymocks outlets within the space of two months.

The new Smales Farm franchise on the North Shore went into liquidation on May 12, less than a year after opening. Six days later, the landmark store on Lambton Quay in Wellington followed.

Then two weeks ago Dymocks announced its company-owned store at 246 Queen St will close for good on June 27.

All of this followed hard on the heels of Dymocks' decision to close its small New Zealand administration office and centralise operations in Australia - hence Mousdale's change of direction.

It's not the only corporate bookstore owner to start singing Waltzing Matilda. REDgroup, owner of the 90 Whitcoulls and Borders stores, has announced it is merging the support structures for all its Australasian retail operations into one transtasman division.

So is the book trade suffering from recession flu, and has Mousdale got rocks in her head to consider hanging out her shingle amid the pandemic?

Basically, no.

Of course no one in retail is immune and booksellers have been affected, says Graham Beattie, a former publisher turned reviewer, industry consultant and blogger.

"Not hugely though - I wouldn't have thought to the extent that people are closing down," he says. "There's stuff going on as well as the recession, I think."

Each of the Dymocks closures had their own set of circumstances, he says.

Queen St was a huge store with a rent bill to match, and Dymocks had long signalled it wanted to find another more suitable site on the strip.

"I think that [closure] probablywould have happened whetherthere'd been a recession going or not."

Like most of his book industry colleagues, Beattie believes that Smales Farm was just a bad site, in the midst of a business park that emptied out at the weekends and with no street frontage or through traffic.

The demise of Dymocks Lambton Quay is seen as a tragedy by the trade. It was one of the best bookshops in the country and run by an experienced operator, Beattie says. But again it was a large space with high rents, and then along came the enormous new Borders store on the Quay. "That coinciding with the recession I think has just tipped them over."

Meanwhile, independent booksellers are holding up, so it's something to do with chains, he believes. "My own view is it's got a lot to do with the distance of the management of these companies from the shop floor. Whereas an independent bookseller will work in the shop, will know his customers, will see what's selling and quickly reorder."

When buying is being done from Australia the best systems in the world aren't going to keep a finger on the pulse, he says.

"Someone in Australia deciding how many copies of Fiona Kidman's autobiography they should stock? They don't even know who Fiona Kidman is."

Books are considered a relatively recession-proof product - if the latest bestseller at, say, $34.95 takes you a week to read that's cheap entertainment. At that price it's still a viable treat or gift.

"Traditionally we have ridden out recession well and this seems to be no exception," says Hamish Wright, owner of Cambridge's Wrights Bookshop and chairman of Booksellers New Zealand.

He says Wrights is holding its own. "There's no growth but in these times stability is good."

Wendy Tighe-Umbers, owner of Time Out in Mt Eden, says the bookstore's sales are "neck and neck" with this time last year.

Dymocks moved into the neighbourhood in August, but she says Time Out has not noticed the effect.

The store is gaining in the gift market, she says - instead of buying a vase or a $250 duvet cover for a wedding or 21st people are buying a good atlas or a dictionary.

However, Tighe-Umbers says regulars who would in other times buy a book every week are cutting back.

Some will still come in and ask for recommendations, and then admit they are putting their name down at the library for the title. "But because they're good customers you don't mind them doing that, because they'll come back when things improve again."

The key in book retailing, the independents say, is that loyal following.

Tom Beran owns The Booklover in Takapuna - where sales are holding steady - and the relatively new Dear Reader in Grey Lynn, which is still experiencing growth. With the help of the Writers Festival, the store's May sales were up considerably.

He has 3000 customers on a loyalty card system and sees them often. They are people that "just don't go to the chain shops, they feel they're not getting the service, the advice, the recommendations that an independent can give".

"We have seen the independents come in to their own in the last five years, probably because [the chain stores] weren't giving enough attention to that service."

Beran and others in the trade believe Dymocks also did not give enough attention to its flailing franchisees.

While Mousdale supports the location of Smales Farm - "it's not a bad location ... it hadn't had time to settle down" - and says the franchisee was nobbled by the unwillingness of her bankers to extend funding when trading was slower than expected, she believes Dymocks could have done more. "I think their problems could have been resolved quite easily, they were not insurmountable.

"The franchisees signed up for local support and it's been taken away from them."

Dymocks chief executive, Don Grover, says it's "rubbish" that the company didn't do enough for Smales Farm and Lambton Quay. "It's absolutely inappropriate to suggest that we weren't there to support them.

"But we're not going to work for landlords and publishers."

He says the problem is not with the book buying market, but with the level of competition. "You could almost say that bookselling is probably an over-supplied market in New Zealand.

"That just means the fit survive, we've got to make sure our model works for our customers."

He also shoots down claims that New Zealand can't be serviced from Australia. He say the Kiwi franchises are now getting better support from a much bigger head office across the Ditch. He says the Tasman is no barrier to an Australasian company: "It takes half the time to get there than it does to get to Perth, and we have twice as many stores in Perth as we do in New Zealand."

Dymocks remains committed, and the company willlook for new locations in central Wellington and Auckland.

Fresh from the restructuring talks, group managing director of REDgroup, David Fenlon, announced late yesterday that eight jobs would go from Whitcoulls' Queen St headquarters.

But he says 12 new positions are being created, and it will retain a local New Zealand buying function.

He says the move is all about reducing duplication of tasks following the company's purchase of Borders, and not a reaction to the recession.

Sales are "holding steady", he says.

PaperPlus CEO Rob Smith makes much of the fact that his chain is the only one to remain wholly New Zealand-based. "Wherever we've seen companies try to run this country remotely from Australia in retail, it becomes challenging. And vice versa."

He agrees New Zealand has a high number of book stores per head compared with other countries, and it's no secret retailing is challenging at the moment.

But he says the chain has focused on bookselling using television and radio personality Kerre Woodham as its spokeswoman, and sales are "a little better than flat".

No one the Weekend Herald spoke to for this story cited online selling as a thorn in their side but it is clear it has made some inroads.

Homegrown Fishpond.co.nz said last year it had doubled its sales each year since it started in 2004.

In 2006 it expanded to Australia and in 2007 it made it on to the Deloitte/Unlimited Fast 50 list of the country's fastest-growing businesses.

REDgroup will launch its own online service in August.

Fenlon says books as a category continue to grow, and that more opportunities for readers to buy are beneficial to both sides of the business.

"The evidence is both in our business and worldwide studies that [online selling] hasn't affected bricks and mortar stores negatively."

BOOKSELLERS IN TWILIGHT ZONE

Anyone who knows a teenaged girl - or, in fact, a not-so teenaged girl - will have heard of Twilight.

The four-book vampire series has been a phenomenon the likes of which the book industry has never seen.

Kevin Chapman, local managing director of its publisher Hachette, says the titles are still accounting for numbers one to four on the New Zealand bestseller list, and in January were responsible for $1 in every $8 spent in the local book market.

While New Zealand books do sell and do make money, international blockbusters like this allow local publishers to invest in their infrastructure.

"We couldn't have as big a sales department or marketing department, we'd struggle to get the sort of weight we have," Chapman says.

This would mean fewer resources to publish and promote New Zealand titles, and is one of the reasons why the local book industry is holding its breath about the decision of an Australian government agency.

After extensive submissions, the Productivity Commission's review of Copyright Restrictions on the Parallel Importation of Books is due out at the end of the month.

The review has caused a furore in the Australian book scene, with top authors such as Tim Winton and Peter Carey making submissions against it.

New Zealand already allows parallel importing, but the effects have been mitigated by Australia's '30/90 rule' - Australian publishers have 30 days from any first publication date overseas to have an edition put out locally, thereby establishing their territorial copyright. Should they go out of stock at any time they have 90 days to re-establish supply. If they don't booksellers are free to import competing editions.

In an environment where most publishers are Australasian it has meant New Zealand booksellers can pretty much get any book they want in a timely manner, thereby reducing the need for parallel importing.

If the Australians open up the market the Kiwi industry fears open slather.

"If multinationals lose their ability to generate revenue from the sale of international books, then that will impact on their ability to invest in local publishing and that will impact on the number of New Zealand books that are able to be published here," Book Publishers Association president Tony Fisk says.

Most retailers also oppose the plan, but Dymocks has put in a submission supporting it.

Chief executive Don Grover says in the current environment everyone is looking for supply chain efficiencies and "there's very little joy coming from the publishing sector".

He says in the closed Australian market there is huge over-charging because retailers have to pay higher wholesale prices, and that extends to New Zealand.

"Dymocks is the largest English language bookseller in Hong Kong - we have significantly cheaper wholesales prices on the same goods [there] than we do in the Australian market."