Extending Shelf Life

The name that Emily Smythe chose for her children’s bookstore spoke volumes. Happily Ever After, ensconced in a cozy yellow cottage in the Silver Lake area, was an enchanted world where kids “could feel right away it was their place,” she said.

But when she was forced to close last month, the name--and the dream it stood for--seemed a bitter irony.

“The reality is you can’t compete with multimillion-dollar corporations,” said Smythe, whose 11-year-old bookstore was one of the latest casualties in a fiercely competitive battle over the $2.7-billion children’s book market. Independent stores such as Smythe’s have been hit hard since industry giants Barnes & Noble and Borders made a push into Southern California five years ago.

“The ones that are still here have survived by their wits, and no other way,” said Nancy Kellogg, HarperCollins’ sales representative in charge of selling to independent children’s bookstores in the state.

At least a dozen such stores have shut down in Southern California since the early 1990s, and few others have replaced them. The number of bookstores belonging to the Southern California Children’s Booksellers Assn. has dwindled from a high of 37 in 1991 to 27 now.

“Every time a new building comes up, we all worry it’s another superstore,” said the group’s president, Shirley Russell, who owns Catch Our Rainbow Books in Torrance.

Once upon a time, children and parents curled up for a good read on Happily Ever After’s velvet couch and antique rockers. Children eagerly volunteered to act out characters during the popular story time. Smythe and her staff helped customers find that special volume to give as a gift or use in a book report. Teachers and librarians relied on them to help compile book lists.

But then the superstores came in, with big discounts and a zillion books and brightly decorated children’s sections--about the size of Smythe’s entire store--with kid-size furniture and lots of fun events.

People still called “the book lady” for advice, but they began buying elsewhere. She poured money into her business, only to see sales plummet 50% in four years. Finally, “I got the hint,” she said. “I called uncle.”

Between 1991 and 1995, when Barnes & Noble and Borders entered the arena, independent bookstores lost 30% of their share of children’s sales. During that same time, the chains’ share increased by 51%, according to the American Booksellers Assn.

Barnes & Noble, the nation’s largest bookseller, with revenue of $2.4 billion in 1996, opened its first Southern California superstore in Costa Mesa in 1993. The company now operates 50 superstores in the region and more than 480 nationwide. Borders, with nearly $2 billion in sales in 1996, runs about 200 superstores nationwide. The chain has opened a dozen of the stores in Southern California since 1994.

In this increasingly splintered market, more than 60% of all children’s books are now sold through discount stores such as Target and Kmart, warehouse clubs and mail-order clubs, according to the trade group.

Well aware of the challenges they face, most of Southern California’s independent children’s booksellers are hustling to find creative ways to stay in business. Gone are the days “when they didn’t need a lot of business sense to make it go,” said Judy Wheeler, executive director of the Southern California Children’s Booksellers Assn.

“They’re understanding their businesses better,” she said. “They’re getting smarter about what’s profitable and what’s not. They’re working longer hours and doing a ton of store events and outreach to the community and schools. And they’re marketing like crazy.”

But no matter how efficiently they run their businesses, the independents--with an average mark-up of 40% and a profit margin of 1% to 2%--can’t offer the discounts the chains and other outlets do. So they are capitalizing on their traditional strengths: specialized service by experts in children’s literature and shelves stocked with handpicked books.

Take Sharon Hearn, owner of Children’s Book World in West Los Angeles for the last 11 years. In 1994, when Borders opened in nearby Westwood, Hearn expanded her floor space by 900 square feet. The following year, when Barnes & Noble opened three blocks away, she added another 40 square feet. Net effect: She doubled her selling space to 2,200 square feet and increased her titles from 25,000 to 60,000.

“The way we combated the chains is we just continued to add titles, to make sure that if somebody is looking for a book, they’ll be able to come here and get it,” said Hearn, who has a master’s degree in education from UCLA and a staff of 12 former teachers and librarians.

Her strategy seems to have worked. After an initial dip of 10%, sales have bounced back and then some.

Among Hearn’s longtime customers is actress Rhea Perlman. On a recent Saturday, she rushed in, son Jake in tow, saying: “I need help. I need a mystery story for a 10-year-old.” A quick interview by an employee established Jake’s interests: “computers and science stuff.” Said Perlman: “They immediately pointed us to this series called ‘The Neck-Banded,’ and he read it in two days, which is amazing.”

Although Perlman said she loves browsing the superstores too--”Bookstores are fun, period”-- she usually shops for her kids at children’s bookstores.

“They have a better selection than the chains. You’re more likely to find every book there is. Also they’re more knowledgeable. They really know their stock.”

A recent survey conducted for Publishers Weekly found that half of all children’s bookstores make more than 50% of their sales by hand-selling--offering personal recommendations to customers. The majority of national chains and superstores reported making 10% of their sales that way, at most.

But before they can get books into customers’ hands, small booksellers must get customers through their doors. For many, that’s meant becoming virtual social directors, hosting a perpetual whirl of events.

Take Mrs. Nelson’s Toy & Book Shop in La Verne. Between story times, author visits, school field trips, arts and crafts classes, visits by costumed characters and cookie-decorating workshops, there’s seldom a blank day on the store’s calendar.

“We’ve really gotten it down to a science now,” said owner Judy Nelson.

The chains started arriving in Nelson’s neck of the San Gabriel Valley about four years ago. By now, she said, “we’re surrounded.” When news came that a Borders was to open just before Christmas 1996 in nearby Montclair, “we knew we really had to get busy.”

She gussied up the store’s signage and fixtures and revamped its layout. She began targeting customers within a 3-mile radius through newsletters, fliers, school visits and a regular ad in a weekly newspaper. She extended her hours and beefed up her Spanish-language and teacher sections--areas the chains typically skimp on.

The result? This Christmas season, sales were down less than 1% from 1996. “So for the amount of competition we’ve got, I guess we’re doing well,” Nelson said.

Like many of her colleagues, Nelson has also taken to the road, logging hundreds of miles to sell books at a dozen school fairs and teacher conferences a month--an exhausting enterprise. Despite her 60-to-80-hour workweek, Nelson, 53, doesn’t take home the $40,000 salary she would have if she’d stuck with her former career working with disabled children.

Like most children’s booksellers, Jody Shapiro at Adventures for Children in Ventura has increased the number of non-book items she carries.

“We’re the sticker queens,” she said of her best-selling sideline. Games, puzzles, stuffed animals, puppets and audiocassettes--which have higher profit margins than books--now account for 32% of profit in children’s bookstores, compared with only 9% for superstores, according to Publishers Weekly.

Shapiro’s strategy for survival boils down to this: “We had to turn any ‘no’ answer we were giving into a ‘yes.’ Customers asked, ‘Are you open evenings?’ Why yes, we are. ‘Open Sundays?’ You bet.

“If people had any reason not to shop here, we had to make it not be a reason.”

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Pat Prince Rose and be reached by e-mail at patprose98@aol.com