Book Stores

SIC 5942

Industry report:

This category includes establishments primarily engaged in the retail sale of new books and magazines. Establishments primarily engaged in the retail sale of used books are classified in SIC 5932: Used Merchandise Stores.

Industry Snapshot

The retail bookstore industry in the early twenty-first century was dominated by several large chains, including Borders Group, Inc.; Barnes & Noble, Inc.; and Books-A-Million. The rest of the market was shared by about 10,000 independent bookstores. Chain stores, many of which opened during the 1970s, were generally located in shopping malls and usually carried between 15,000 and 20,000 of the most popular titles targeted for a broad consumer market. Independent bookstores often carried a greater variety of titles, between 30,000 and 40,000 per store. With 900,000 books in print, independent bookstores often specialized, offering a wider variety of titles than the chain stores for niche markets such as religion, science and technology, hobbies, or children's books.

Booksellers struggled during the first years of the twenty-first century along with the entire U.S. economy. Revenues rebounded each year from 2002 to 2005, but the industry continued to face numerous obstacles in a challenging economy. While the big chains continually shuffled resources to get the most from their assets, thousands of independent booksellers struggled to hold back the onslaught of the bookstore giants.

Total sales of books in the United States in 2006 were $24.2 billion, according to the Association of American Publishers (AAP), representing an increase from $23.7 billion in 2004.

According to industry statistics, there were an estimated 20,142 establishments engaged in the retail sales of new books and magazines in 2009 valued at more than $14.37 billion with industry-wide employment of 168,446 workers. On average, each book retailer employed eight employees who generated about $1 million annually. The majority of book retailers were scattered throughout California, Texas, and New York.

Book stores were responsible for the bulk of industry share with 76.2 percent with sales of nearly $12 billion. College book stores numbered 17,396 with 8.1 percent in market share and sales that exceeded $1.2 billion. Religious book retailers with 1,998 stores held 9.9 percent in market share valued at $985.2 million. Comic book retailers with 5.8 percent in market share had sales of $136.4 million, while children's book stores had sales of $44.7 million.

In the late 2000s, book store sales were impacted first by the Internet and the surge in electronic books followed by the economic downturn that began in mid-2008 and only intensified in 2009. The Association of American Publishers reported book sales fell 2.6 percent to $24.3 billion in 2008 and 1.8 percent to $23.8 billion in 2009, a reflection of a stagnant national economy.

Organization and Structure

In the 1990s chain store operators began opening dozens of "superstores," which dominated the industry in the mid-2000s. These large, freestanding bookstores carried between 50,000 and 150,000 titles, offered substantial discounts, and provided a variety of customer amenities such as reading rooms and coffee bars. Superstores prompted speculation that independent booksellers would be driven out of business. However, other industry analysts noted that there were similar dire predictions in the 1970s during the rapid growth of mall-based chain stores. While chain stores did siphon business from the independent bookstores, they also greatly expanded the total market. In fact, market research showed that the presence of a superstore increased the local market for books by 50 to 60 percent.

Multimedia stores that carried books, audiotapes, videotapes, and computer programs also began appearing in the early 1990s. While other bookstores had sections devoted to electronic information media, multimedia stores mixed different media by category rather than by format, placing the printed works of Shakespeare alongside videocassettes of his plays. WGBH Learningsmith stores in Massachusetts were leaders in the area of multimedia bookstores. The company licensed the use of "WGBH" from the award-winning public television station in Boston.

Virtual bookstores also gained popularity in the mid-1990s due to the possibility of online commerce offered by the Internet. Of these, Amazon.com was by far the most popular and most successful, offering more than one million titles.

Background and Development

The first bookstores appeared in the American colonies as early as 1640, with Boston becoming a pre-Revolutionary War center for book publishing and selling. By the time Benjamin Harris, who published the first newspaper in the colonies, opened a bookstore in 1686, there were already seven other booksellers in Boston. By 1700 there were as many as 30 booksellers in the town, which then had a population of about 10,000. Although a fire swept through the bookseller district in 1711, destroying all but one bookstore, within a few years there were even more bookstores in Boston.

In addition to importing books from England, most early booksellers also published them. For example, Hezekiah Usher, who may have opened the first bookstore in Boston in 1642, published Spiritual Milk for Boston Babes in Either England, the famous catechism by Puritan minister John Cotton, in 1656. The bookseller and newspaper editor Benjamin Harris published the first edition of the New England Primer. In fact, bookselling as a profession independent of publishing did not begin to emerge until about 1800.

Early bookstores were more like variety stores than bookstores in the modern sense. For example, Andrew Bradford offered his customers merchandise ranging from feathers to pickled sturgeon. Thomas Fleet, a publisher of children's books in Boston, sold slaves from his bookstore. Moreover, colonial bookstores often carried a remarkable variety of books. In 1766 the Boston shop owner John Mein published a catalogue listing more than 1,700 titles. Religion and philosophy dominated the early book trade. The widespread availability of books by John Locke and other philosophers who wrote about natural rights helped set the stage for the American Revolution, and booksellers were often among the intellectual leaders of the colonies. Novels also were popular, however, including many with suggestive titles such as Married Libertine and Suspicious Lovers. Memoirs of a Woman of Pleasure, originally published in England in 1748 and better known as Fanny Hill, also was available in many bookstores.

The first post-Revolutionary War advancement in bookselling came in the 1840s, when an American, Richard Hoe, invented the rotary press. The first Hoe presses were able to print 8,000 sheets an hour and later increased to 20,000. This technology made possible a mass market for books. It also hastened the differentiation between publisher and bookseller and greatly increased competition. The technology led to the creation of the paperback industry. The first paperbacks were pirated reprints of English novels printed as supplements to newspapers. Eventually they were sold as separate publications.

Bookstores flourished between 1845 and the beginning of the Civil War. However, bookselling began to change dramatically about the time the war ended. In the late 1860s most large publishers were operating their own bookstores in competition with independent booksellers. In addition, publishers began offering volume discounts to large dry goods stores that opened book departments. Volume discounts eventually cut bookstores out of the textbook trade altogether and remained an issue of contention between publishers and bookstores into the early 2000s, especially with the development of chain stores in the 1970s.

Perhaps even more significantly, in the years following the Civil War publishers' agents began crossing the country selling books door-to-door by subscription, taking prepublication orders for delivery direct to the customers. Publishers often sold books directly for less than they sold them to bookstores and even offered to pay for postage. In 1872 Publishers Weekly warned that "the retail book trade cannot live against the competition of manufacturers and either the competition or the retailers must cease to be." John Wanamaker, whose legendary Philadelphia department store was able to undercut bookstores, flatly declared, "Book selling is a decaying business."

Booksellers vs. Publishers.
The first attempt to organize American booksellers occurred in 1802, when fifty publishers and booksellers met in Philadelphia to form the American Company of Booksellers. That association lasted only four years. In 1872 publishers and booksellers again joined forces and formed the American Book Trade Association (ABTA). This time they agreed to limit wholesale discounts to no more than 20 percent. However, the public viewed the ABTA as a cartel organized to keep prices high, and newspapers attacked the plan vehemently. Many publishers also failed to live up to the agreement, and the ABTA lasted only five years. In 1890 the publishers formed their own association aimed at forcing bookstores to sell books at a retail price set by the publisher. The publishers agreed that they would continue offering discounts, but they also agreed to blackball stores that violated the "net price" system.

In 1900 six booksellers announced plans to form the American Booksellers Association (ABA) to lobby on behalf of bookstores. The ABA, which held its first convention in 1901, wholeheartedly endorsed the publishers' net price system, since it would eliminate price-cutting by department stores and so-called "book butchers," who bought quantities of discontinued or surplus books and sold them at a fraction of what other bookstores charged. However, in 1890 Congress passed the Sherman Antitrust Act, designed to prevent the unfair restraint of trade. In 1902 Macy's Department Store in New York filed suit under the Sherman Antitrust Act against the American Publishers Association and the American Booksellers Association. Eleven years later, in 1913, the U.S. Supreme Court declared the publishers' actions illegal and let stand $140,000 in damages awarded to Macy's by a lower court.

A near-heroic figure in the case, from the department store's perspective, was E. L. Kinnear. Kinnear was Macy's book buyer who managed to keep the store's book department stocked while the suit was heard, despite being blacklisted by the publishers. She used surrogates as far west as Denver to buy books and secretly ship them to Macy's. Macy's would continue to be a thorn in the side of New York booksellers, according to a Publishers Weekly retrospective: "During the '30s, the great crusade of the retailers was against price-cutting. The department stores were the chief discounters and books were high on the list of loss leaders. Macy's especially was the hated enemy."

The American Publishers Association disbanded in 1914, following the Supreme Court decision. However, the ABA survived and remained concerned with price stability. Publishers Weekly noted that while the Supreme Court made it clear that the publishers had acted illegally, the case also made clear "that unwarranted 'cut prices' are a stupendous merchandizing blunder, if not immoral or illegal." For a while, fair trade laws passed by several states in the early twentieth century allowed manufacturers to establish minimum retail prices on trademarked products, achieving the same results the publishers had wanted. The Miller-Tydings Act, passed in 1937, legitimized these state laws by setting aside federal antitrust laws. However, the consumer interest groups eventually won out, and most of the fair trade laws were repealed between 1950 and 1970. Congress eliminated the last of them in 1975.

Book Clubs.
The first book clubs, formed in the 1920s, immediately became the target of opposition from retail bookstores. The Literary Guild and the Book-of-the-Month Club were both denounced at the ABA's convention in 1927. By the 1940s book clubs had become such a concern that the ABA complained to the Federal Trade Commission (FTC) about violations of fair trade laws then in effect. The ABA also complained that publishers were leasing printing plates to the book clubs for low-cost reprints of popular books but refusing the same privilege to members of the ABA. In 1951 the FTC charged several publishing houses with unfair trade practices. The most significant outcome of the case was that publishers were not allowed to require bookstores to adhere to minimum retail prices if book clubs were not bound by the same requirement.

During the 1980s book club sales did not keep pace with the burgeoning retail bookstore industry. While total book sales grew about 8 percent per year in the 1980s, and sales at retail bookstores nearly doubled, book club sales grew about half as fast. With the increase in bookstore competition, readers often received discounts equal to or greater than the discounts offered by book clubs and did not have to wait for delivery.

By the early 1990s book club sales were decreasing, and clubs were beginning to change their marketing tactics to emulate successful mail-order clothing outlets. This included greater market segmentation and direct-mail advertising, deeper discounts, and faster service through twenty-four-hour telephone ordering. The Literary Guild was experimenting with a "900" telephone number. Callers to the twenty-four-hour Home Previewline could listen to one or several recordings by popular authors who either discussed their works or read selections. Callers could then order the books they wanted.

Perhaps the most significant change was that many book clubs were abandoning negative-option selling, in which members would receive monthly club selections unless they mailed in an order card declining the book. In 1993 The Wall Street Journal reported that the Book-of-the-Month Club planned to begin a new club drawn from millions of former members who quit because of the negative option. More than half of all Book-of-the-Month Club members quit every year.

Chain Stores.
The Walden Book Co., which had operated rental libraries, opened its first retail bookstore in Pittsburgh in 1962. Four years later the Dayton Corp., a department store conglomerate, opened the first B. Dalton Bookseller store in suburban Minneapolis, in the nation's first multilevel enclosed shopping mall. Waldenbooks and B. Dalton Bookseller, which became the two largest bookstore chains in the United States, transformed the bookselling industry. Prior to Waldenbooks and B. Dalton Bookseller, bookstores tended to be small, crowded, and situated in out-of-the-way locations. Waldenbooks and B. Dalton Bookseller bookstores positioned themselves in high-traffic malls and created colorful displays that invited the general public to browse. John Pope, then advertising director for B. Dalton, told Saturday Review in 1979, "What we've done is taken the awesomeness out of the book-buying experience." John Dessauer, author of the annual Book Industry Trends, was less complimentary, especially about the selection of titles: "I think of the chains as doing for reading what the fast-food operations have done for eating. You can preach to the chain stores about cultural obligations, but with their economics, they really can't afford to mess with pate de foie gras."

The chain stores, led by Waldenbooks and B. Dalton with hundreds of outlets each, were so successful that by the early 1970s some industry analysts were predicting the end of independent bookstores. They also predicted that chain stores would have a harmful effect on publishing. Victor Navasky, writing in the New York Times Book Review, warned that volume-buying chain stores would force publishers to abandon books of limited appeal and focus solely on mass-market best sellers.

ABA Executive Director G. Roysce Smith countered such complaints in Publishers Weekly, arguing that as long as there were readers for books, somebody would publish them and some bookstore would sell them. The literary, social, or political value of a book would determine its success, he claimed, not the chain stores. Although many independent bookstores closed during the 1970s, often due to chain store competition, Smith also noted that the total market for books was expanding. So even while the market share for chain stores was increasing, there was still a growing market for independent bookstores. Book sections in department stores, especially those located in malls with chain-owned bookstores, suffered more than independent bookstores.

The same fears reappeared in the late 1970s with the growth of discount stores. Crown Books, founded in 1977, was one of the first and most aggressive discounters, selling best sellers for as much as 40 percent off the publisher's suggested retail price. "How to deal with a discounter" was a popular topic at ABA conferences in the 1980s. But by 1988 even discounters were seen as good for business, as the ABA acknowledged the value that competition brought to the bookseller industry. In the organization's report for the Bowker Annual Library and Book Trade Almanac, Allan Marshall, the director of professional development and education, wrote that "sellers of books at retail are enjoying an increasing market share as more and more people are either returning to or discovering for the first time the joys of shopping in bookstores, having originally been introduced to the concept of book ownership through book clubs, direct mail, or discounters."

Censorship.
Bookstores were often at the center of controversy regarding censorship, obscenity laws, and the First Amendment guarantee of free speech, which to booksellers also meant the right of adults to read uncensored material. Periodically, especially in the 1920s, 1950s, and 1970s, police departments raided bookstores, arresting clerks and storeowners and confiscating books they felt violated obscenity laws or were otherwise bad for the community, including books on religion and politics. Community organizations also tried to force bookstores to quit selling books or magazines they found objectionable through boycotts, picketing, and occasional violence.

The first federal obscenity law was the Tariff Act of 1842, which made it illegal to bring "indecent and obscene" material into the country. The Comstock Law, passed in 1873, made it illegal to use the U.S. Post Office to distribute obscene materials or information about birth control and abortion. In 1957 the Supreme Court ruled that the First Amendment does not protect pornographic material. In 1964, the Supreme Court specifically ruled that Henry Miller's Tropic of Cancer, written in 1934 and perhaps the most censored book in American history, was not obscene. In Miller v California in 1973 the Supreme Court ruled that whether something was obscene depended on "local community standards."

The first official notice the ABA took of censorship was conciliatory. Despite the politically motivated book raids of the 1920s, which resulted in the arrest of many booksellers, in 1923 the ABA passed a resolution deploring the sale of "unclean" books. In 1925 the ABA issued a statement opposing the publication and distribution of "salacious" books. The ABA sponsored a discussion on censorship at its convention in 1930 but did not change its official position opposing publication; it therefore approved the censorship of "obscene" books.

In the 1950s, however, there was another rash of banned book inspired by the investigations of the House Committee on Un-American Activities and the anticommunist crusade led by Senator Joseph R. McCarthy. Libraries and bookstores were forced to remove books such as John Steinbeck's classic The Grapes of Wrath, which was seen as a communist polemic.

The Supreme Court's "local community standards" ruling in 1973 set off another round of police raids and prosecutions for selling obscene books. At its convention that year the ABA protested the ruling and issued a statement in support of the President's Commission on Obscenity and Pornography, which in 1970 had recommended the repeal of laws restricting the sale of obscene or pornographic materials to adults. In 1973 the ABA also helped form the Media Coalition, an organization of publishers, booksellers, and motion picture producers that circulated information on censorship laws and activities. In Bookselling in America and the World, Chandler B. Grannis wrote that joining the Media Coalition marked the ABA's full commitment against censorship.

In the 1980s and early 1990s the ABA became more proactive in its opposition to censorship. Beginning in the early 1980s the ABA cosponsored an annual Banned Books Week to draw attention to the many books that different groups were trying to ban or remove from library shelves. The group also filed suit against "minor's access" laws that would force bookstores to remove books from shelves or store displays. Through the Media Coalition the ABA opposed efforts to declare pornography a form of sexual discrimination.

In 1986 the ABA publicly opposed the nomination of Robert Bork to the Supreme Court because it believed his views on the First Amendment would be detrimental to bookselling. Ironically, some bookstores were accused of engaging in censorship themselves for refusing to stock The Tempting of America, written by Bork.

In 1989, when Iran's Ayatollah Ruhollah Khomeini called for the assassination of author Salman Rushdie, several bookstores, including Waldenbooks, B. Dalton Bookseller, and Barnes & Noble, pulled copies of his controversial book, The Satanic Verses, from their shelves. However, other bookstores used the incident to call attention to the ongoing struggle against censorship by promoting the book, and the ABA took out ads protesting Iran's attempt at intimidation. The chain stores reversed their policies within a few days, in part because of a consumer demand for the book. Two bookstores in the United States were firebombed apparently because of the book, but there were no injuries.

In 1990 the ABA took out full-page ads in major newspapers nationwide to protest censorship of all forms, from the banning of Little Red Riding Hood by a California school system because it was deemed too violent to anti-pornography groups that were trying to force bookstores to stop selling Playboy magazine.

In the mid-1990s superstores continued to dominate the market, with Borders Group, Inc., the undisputed leader. The market was changing, however, with a new form of competitor rapidly gaining market share--the online bookstore.

Of these, Amazon.com claimed to be not only the largest online bookstore but also "Earth's biggest bookstore." The company offered 2.5 million titles in its Web-based store in early 1997. With infinite shelf space and no retail rent, overhead could remain low, and consumers could reap the benefits of lower prices. Conceived by the former hedge-fund manager Jeff Bezos, Amazon.com offered online chats with authors and reader reviews in addition to a superb list of titles. A new service called MatchMaker was announced in early 1997. Using sophisticated collaborative filtering technology, the service would recommend books that customers were likely to enjoy. The Amazon.com model of "sell-source-ship" meant little inventory to buy or track and no returns to publishers. Instead the company ordered products after receiving customer orders.

The surge in online sales forced drastic changes in the industry. In 1996 Encyclopedia Britannica turned to direct mail, television advertising, and its own Web site. In turn, the company completely eliminated its sales force of 550 people. In November 1998 Barnes & Noble acquired Ingram Book Group, a major book distributor, to better serve its online customers. This only exasperated independent booksellers who were fearful that already-large chains were getting better deals from publishers and distributors than the smaller stores. In March 1998 the ABA and twenty-six independent booksellers filed an antitrust suit against Barnes & Noble and Borders saying the chains received favorable terms and secret discounts not available to all in the industry. The trial was set for 2001, but in April that year the ABA agreed to settle with the two bookstores for $4.7 million.

Independent booksellers fought the encroachment of superstore chains and online services. A group of independent booksellers in California protested to the state government in December 1999 that the online services should be collecting sales tax. Not charging sales tax gave the online seller an advantage over brick-and-mortar stores. The group said the law states tax could be collected if the company has a physical presence in the state. They argued that both Borders and Barnes & Noble had stores in California and that Amazon.com had affiliate programs with companies in the state.

Some independent booksellers turned to the Internet to supplement their sales. Some found it challenging because it was hard to get up and running, and some did not have the staff to maintain a site. Online sales accounted for only 3 percent of book sales in 1998, but that number grew rapidly. Some smaller bookstores, especially those specializing in a narrow field, were getting out of storefront operations altogether and opening up on the Internet.

Perhaps the biggest change to the retail bookstore industry in the first decade of the twenty-first century was the proliferation of booksellers' presence on the Internet. According to the U.S. Census Bureau's Statistical Abstract of the United States, 49 percent of all book purchases in 2000 were completed via the Internet. Superstore experts Borders and Barnes & Noble had worked extensively to integrate their brick-and-mortar operations with their online presence. Customers were able to return an online purchase to a store location, and some stores had options for customers to place an order online in the store.

The nationwide "brick-and-click" companies had the independent sellers lobbying state governments for consistent sales tax assessment. Independent book dealers must charge sales tax on any sales conducted in the state within which their businesses reside. Likewise, the ABA argues, chain bookstores should be required to collect sales taxes on any sales originating in states where they have a physical presence. However, the big chains, namely Borders and Barnes & Noble, created separate business entities to conduct online operations, separated from their superstores, so that state taxes are only collected in the state in which their Internet operations exist. The ABA wanted state governments to recognize brick-and-mortar operations in conjunction with online operations, thus requiring the big chains to charge sales taxes for online sales to any state in which they operate a brick-and-mortar store. To do otherwise, argued the ABA, unfairly puts independent booksellers at competitive disadvantage. The ABA's claim was bolstered in January 2003 when a group of national retailers, including Wal-Mart, agreed to begin charging sales taxes for all online sales.

Despite the proliferation of online shopping at the advent of the twenty-first century, most people continued to buy books from brick-and-mortar superstores, largely due to selection and browsing convenience. The online superstore giant Amazon began showing the inside pages of many of its books online so browsers could view the contents before deciding if the book was what was needed. As more shoppers flocked to superstores, more smaller bookstores, even those owned by the "Big Three," closed due to lack of customer traffic. Convenience was driving purchases made as well, with gift cards being the big sellers across the country in 2004, sales of which increased 256 percent over 2003 totals.

According to the Association of American Publishers, in 2006 total book sales reached $24.2 billion, up from $23.7 billion in 2004. Trade books, which include adult and juvenile hardbacks and paperbacks, generated $8.3 billion. Adult trade hardback revenues rose 4.1 percent over 2005 to $2.6 billion. Adult trade paperback sales showed the strongest growth in 2006, increasing 8.5 percent over the previous year to $2.3 billion. Juvenile hardbound revenues fell by 2.0 percent, and juvenile paperback sales fell by 0.6 percent. Mass market paperback book sales grew by 4.6 percent to $1.1 billion in 2006, while book club sales fell by 3.0 percent to $640 million.

Among educational titles, sales of K-12 products fell by 5.8 percent to $6.2 billion, while higher education titles fared better with sales of $3.5 billion, up 2.8 percent. Sales of audio books dropped 11.7 percent to $182 million from 2005 to 2006, although this still reflects an annual average increase of 6.2 percent from 2002. Sales of E-books increased from 2005 to 2006 by 24.1 percent, reaching $54 million. Religious book sales decreased by 10.2 percent from 2005 to 2006.

Current Conditions

The Association of American Publishers reported book sales fell 2.6 percent to $24.3 billion in 2008 and 1.8 percent to $23.8 billion in 2009. Trade book sales reached $8.5 billion in 2007 before falling to nearly $8.1 billion in both 2008 and 2009. Adult trade hardback sales increased 6.9 percent to $2.6 billion in 2009, while adult trade paperback fell 5.2 percent to $2.2 billion. While juvenile hardbound sales fell 5.0 percent to $1.7 billion in 2009, juvenile paperback sales increased 2.2 percent to $1.5 billion. Both mass market paperback book sales and book club sales fell 2.0 percent and 4.0 percent, respectively.

Book sales derived from K-12 fell 13.8 percent to $5.2 billion in 2009, compared to $6 billion in 2008 with the higher education titles category climbing 12.9 percent to $4.2 billion. Audio book sales fell 12.9 percent to $191 million. Most notable was sales of E-books with a 176.6 percent gain from $113 million in 2008 to $313 million in 2009. Lastly, religious book sales fell from $723 million in 2008 to $658 million in 2009.

Both Borders and Barnes & Noble continue to face significant competition from big box discounters like Wal-Mart and Target. After all they are responsible for more than half of total book sales. Then, there's the online giant, Amazon who sold 19 percent of traditional books in 2009, while Barnes & Noble garnered 17 percent and Borders' only 10 percent. In fact, Amazon is on target to hold 28 percent of all traditional book sales by 2015.

The smaller book stores were most at risk of going belly up, but some were riding out the storm with new services like creative-writing classes or even offering literary summer camps. In essence, book stores were attempting to "reinvent themselves." In the meantime, Barnes & Noble were focusing on its online presence, providing superior customer service, and introduced its own e-reader, the "Nook."

Between steep competition and the staggering economy book stores continued to struggle in 2010. Barnes & Noble's stock fell below $15 from a high of $45 in 2005. Borders Group has fallen 95 percent from its peak. Online book retailer, Amazon sold 43 percent more e-books than traditional books in the second-quarter of 2010. As technology continues to evolve, some analysts suggest book stores will disappear just as record stores did with the advent of downloaded music.

According to James McQuivey, a Forrester research firm analyst, e-book sales were on target to total $966 million at 2010 years end. "By 2015, the industry will have nearly tripled to almost $3 billion, a point which the industry will be forever altered," McQuivey added.

Industry Leaders

Barnes & Noble is the largest bookseller in the United States. In 2006 the company operated 793 bookstores stores in fifty states, including stores under the names Barnes & Noble, B. Dalton, Doubleday, and Scribner's, as well as barnesandnoble.com. The company posted $5.26 billion in sales in fiscal 2006. Its superstores accounted for approximately 86 percent of sales. The company is credited with introducing the superstore concept (which Borders embraced) and has also established a significant online presence. Barnes & Noble was founded in 1873 by Charles Barnes & began as a used book business. William Barnes, Charles's son, took over as president of the business in 1902 and later sold the firm to C. W. Follett. Leonard Riggio paid $1.2 million for Barnes & Noble in 1971, and with the acquisition of Marboro Books in 1979, the company entered the mail-order and publishing business.

Once the largest bookstore operator in the United States, Borders has been second to Barnes & Noble since 1992. In 2006 Borders Group had 30,000 employees and operated more than 1,100 retail stores worldwide, under the names Waldenbooks, Borders, and Planet Music (CDs). In 1993 Kmart Corporation was the nation's second largest bookseller, owning two of the largest bookstore chains, Walden Book Company, Inc. and Borders, Inc. In early 1994 Kmart combined Borders and Walden into the Borders-Waldenbooks Group. As part of the restructuring, Walden closed 187 underperforming outlets. The downsizing at Walden was in marked contrast to Borders, which experienced rapid expansion and went public after a 1995 buy back of stock by the original Border brothers from Kmart, consolidating its three divisions in Ann Arbor, Michigan. Changes related to the spin-off led to a $211 million loss in 1996. Borders Group continues to focus on its superstores, which average 30,000 square feet. The company posted sales of $4.1 billion in 2006.

Walden Book began as a small rental library in Bridgeport, Connecticut, in 1933 by Larry W. Hoyt, who leased space in a department store. He rented books for three cents per day. By 1948 the company was operating 250 rental libraries and had begun to sell books as well. In 1962 the company opened its first retail bookstore in Pittsburgh. It was named The Walden Bookstore, a reference to Walden Pond, the lake near Concord, Massachusetts, where author Henry David Thoreau lived from 1845 to 1847. The company opened fifty more Walden Bookstores in less than seven years.

In 1969 Walden Book was purchased by Carter Hawley Hale Stores, Inc., the parent company to several leading department stores. The store names were changed to Waldenbooks nationwide in 1972, and in 1981 Walden Book became the first company to operate retail bookstores in all fifty states. The company also opened a central warehouse, the first in the industry, and linked all 750 of its stores to a nationwide computer system that tracked sales and inventory. In 1984 Walden Book was purchased by Kmart, then the second-largest retailer in the United States. Walden Book acquired Brentano's, a chain of upscale bookstores, the same year. The first Waldenbooks and More superstore opened in Levittown, New York, in 1985. Walden Book opened the first Waldensoftware and Waldenkids stores in 1987.

Borders, which started the industry's return to large, comfortable, well-stocked bookstores with knowledgeable workers, was founded in 1971 by brothers Louis and Tom Borders in Ann Arbor, Michigan. By 1976 they had developed a computerized inventory and ordering system that made their Borders Book Shop one of the most profitable and best-run bookstores in the country. While the industry average for unsold books returned to their publishers was about 40 percent in 1990, Borders returned just 8 percent, despite offering five to ten times as many titles as the average mall bookstore. Borders also sponsored book signings, poetry readings, literary discussions, and storytelling sessions.

In 1985 Borders expanded to Birmingham, Michigan, and Indianapolis, Indiana. When it was purchased by Kmart in October 1992, Borders was operating 19 superstores. Kmart opened three more Borders Book Shops in 1992 and shifted responsibility for its nine Basset Bookstores from Walden Book to Borders. The Basset stores were to become Borders Book Shops in 1993. In 1992 Borders also added espresso bars and larger children's book sections to several stores and opened the first two Borders Books and Music stores, which offered 70,000 musical selections and 9,000 videotape titles in addition to books. The stores targeted the musical tastes of book buyers in the 35-to-54 age group. Kmart opened one new Borders Book Shop and 13 more Borders Books and Music superstores in 1993. Plans were for the new stores to have at least 22,000 square feet of floor space, compared to about 15,000 square feet in the older stores. In July 1995 two labor unions (IWW and UFCW) attempted to organize workers at Borders locations. By the end of the year two Borders stores unionized, but union drives at other bookstores failed.

Chairman Herbert H. Haft and his family owned a controlling interest in Crown Book Corporation, which was founded in 1977. The leading discount bookstore chain, Crown Books sells bestsellers for as much as 40 percent off the publisher's suggested retail price. In 1990 the company opened its first Super Crown Bookstore, which offered about 30,000 titles, and by 1993 there were thirty-two Super Crown Bookstores. In 1992 the publicly owned company had approximately 2,300 employees and $232 million in sales. In 1993 the company operated 247 Crown Bookstores, each of which carried 3,000 to 4,000 titles. In the mid-1990s power struggles in the Haft family created problems within the business. Herbert ousted his son Robert and replaced him with his other son, Ronald. Robert sued and won a jury award of $34 million. Ronald stepped down in 1995, leaving the company in the hands of CEO Steve Stevens.

In mid-1998 Crown Books filed for Chapter 11 bankruptcy, citing downward sales and losses that continued to mount. Crown broke free of bankruptcy protection in November 1999, with ninety-two stores in Washington, Chicago, San Francisco, and Los Angeles, and sales projections of $190 million for 1999. The company said it would remain a deep-discount bookseller, pointing out that its prices were lower than those of online sellers when shipping costs were taken into account. In 2001 the company filed again for Chapter 11 bankruptcy and announced that it would close 28 of its 91 stores. In April that year Books-A-Million purchased eighteen Crown stores, and the rights to use the Crown Books name and logo were purchased by the owner of A&S Booksellers, Andy Weiss, who maintained Crown's tradition of selling deep-discount books.

Based in Birmingham, Alabama, Books-A-Million Inc. was the number-three bookstore in the country in the mid-2000s. All but 20 percent of its 200 stores in twenty states were superstores. The company also operated Bookland stores, with about thirty-five locations. In 2006 Books-A-Million reported $503.8 million in sales.

In the late 2000s, Barnes & Nobel reported revenues of $5.4 million in 2008 reaching $5.8 billion in 2009 with 35,000 employees. The company has grown its bookstores from a total of 793 in 2006 to an estimated 1,355 stores in 2010. During 2009 the company launched the Nook e-book reader in response to increased competition from the growing trend of e-books. Borders Group through its 500 superstores, 175 smaller shops, and online retail reported revenues of $3.8 billion in 2008; however, sales plummeted to $2.8 billion in 2010 with 20,600 employees. The company shed its Paperchase stationery and gift business in the United Kingdom in 2010, a direct result from its sluggish book sales. Books-A-Million, Inc. posted revenues of $535 million in 2008, falling to $508 million in 2010 with 5,500 employees.

Workforce

According to the U.S. Census Bureau's Statistical Abstract of the United States, book stores employed 142,000 people in 2004, with an annual payroll of $1.7 billion. In 2003 there were more than 214,000 people employed in the book, periodical, and music store industry combined.

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