15/04/2014 - 14:01

Perth bookshops a good read on retail fight

15/04/2014 - 14:01

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Independent bookshops are responding to changes in demand through fewer, but better stores and smarter selling strategies.

NORTHSIDE: James Calligaro has sold his New Edition Fremantle store but is keeping his Northbridge bookshop, which will be renamed Northside Books. Photo: Attila Csaszar

Independent bookshops are responding to changes in demand through fewer, but better stores and smarter selling strategies.

It sounds like the plot of a bestseller novel, but it’s being played out on the streets of Perth.

A small business owner, up against online retail giants and tough landlords, battles to return his revenue to pre-GFC glory days. It’s looking grim …  but just when all hope appears lost, help arrives from an unexpected source.

In 2006, the owner of independent Fremantle bookshop New Edition, James Calligaro, expanded his business and moved to new 300 square metre premises at 82 High Street.

However, when the GFC hit the business almost immediately suffered a 30 per cent drop in revenue, and the premises’ previously annoying detractions, such as a large power bill and expensive rent, became a stifling impost.

The effects of the GFC were widespread and Fremantle’s community watched as the port city’s retail hubs lost store after store, with even large retailers such as Myer succumbing to falling sales.

Mr Calligaro’s response was to harness community support to push through approvals for a sub-leased cafe on site, something the landlord and council had previously denied, but under the circumstances recognised as worthwhile.

He also stopped night trading, but in addition to managing an existing sub-lease to a fashion retailer, the solution came at a price.

“Once (we had) that dip in turnover, I pulled all kinds of tricks. I thought ‘ok, I can rebuild this’,” Mr Calligaro told Business News.

“You try and create this mass of energy but it’s tough because you become a manager of sub-leases and you become an administrator and it starts to break up your day. It just gets to be complex.”

Not long after Mr Calligaro moved New Edition to its larger store in Fremantle, but before the GFC, the Metropolitan Redevelopment Authority approached him and suggested he open another bookshop in Northbridge.

He took up the opportunity, viewing it as a good strategy to diversify the business and take advantage of a government lease.

“For most people, government leases are the best option because governments are answerable to communities in a way that private landlords won’t be and don’t care (about),” Mr Calligaro said.

The second smaller store in Northbridge proved to be a lifeline as the GFC hit his larger store’s sales.

Part of the Northbridge venue’s success has come from its cafe, something also found at other independents, including Bookcaffe in Swanbourne and Millpoint Caffe Bookshop in South Perth.

However, even with the successful sub-leases, revenues failed to recover to pre-GFC levels, and Mr Calligaro decided to sell.

About two years ago he employed a business broker to cold call bookshop owners offering to sell the New Edition store in Fremantle, or if it sweetened the deal, possibly both stores.

Readings, which owns a number of independent bookshops in Melbourne, was high on the list of possible buyers, but declined after careful consideration.

There was interest from a mix of Perth bookshop owners and people toying with entering book retail, but no offers.

Faced with his lease ending in March this year and significant make-good costs, Mr Calligaro announced the closure of New Edition Fremantle was likely – and it was at this 11th-hour juncture that East Victoria Park bookshop owner Alan Sheardown stepped into the story.

Mr Sheardown, who opened Crow Books in East Victoria Park in 2010 after managing Planet Books in Mount Lawley, said he initially wasn’t interested in owning two bookshops.

“The email went out saying ... if he doesn’t sell it he’s probably just going to walk away. And so I thought well that’s ridiculous, we can’t have Fremantle not have a bookshop,” Mr Sheardown told Business News.

Mr Sheardown ended up buying the New Edition name, its website, Facebook presence, and its shelving and fixtures.

When he reopens New Edition Fremantle later this month it will be at a new location at 41 High Street, in a store half the size, without a cafe and with new books.

Despite previous challenges, Mr Calligaro has a rosy outlook about Fremantle’s retail future and Mr Sheardown’s ability to run New Edition successfully, largely due to his experience and having a less expensive lease in a smaller 150sqm space.

“Alan will be part of the new era, and the new era is strong hospitality, interesting bars, a proactive council,” Mr Calligaro said.

Meanwhile, Perth stalwart independent bookshop Boffins is also moving, from 806 Hay Street to 88 William Street.

The new location will allow the 25-year-old business to display all of its books on a single basement level 30 per cent larger than its previous multi-level premises.

In addition to expanding the shop, Boffins is capitalising on the demise of other bookstores and will begin offering fiction and children’s books for the first time alongside its large range of technical titles.

Boffins will reopen for business later this month.

In recent years, prominent chain bookshops Borders and Angus & Robertson closed all of their shops, and Dymocks has reduced its numbers.

Boffins said its specialist niche was continuing to do well and as bookshops in the Perth CBD had closed over the last few years it had decided to cater for increased requests for fiction books.

Mount Lawley-based Planet Books manager Sam Baker said Perth’s remaining bookshops were mainly independents that continued to be competitive against major online entities such as amazon.com and bookdepository.co.uk.

“I think before (the industry) was glutted. I think it was too easy for any person to wander in and set up a shop. I think it’s better now because it’s a lot more competitive and the bookshops that have come out of this process the last couple of years are much healthier than your average bookshop was before that,” he said.

Mr Baker said bookshops that had kept trading had managers and buyers who worked on the shop floor, rather than the business being managed externally.

“(Independent bookshops) are very much tailored to the communities that are around us, and if something changes or if there’s an event coming up we adapt to that very quickly,” he said.

“We’re not really competing against each other. Bookshops in Perth are spread out enough that there’s very little shop-on-shop direct competition. The main game is us versus Amazon, us versus Book Depository and if you’re not playing that game then you’re not in it.”

Mr Baker said the key to drawing Perth buyers into bookshops was offering a comprehensive range, reasonable prices and a place people enjoyed spending time.

“How we compete with (online booksellers’) prices is having it on the shelf on the day looking attractive. If they wanted to wait two weeks they could get it cheaper, but they don’t, they want it today and they want to come someplace that’s attractive and interesting and intellectually stimulating,” Mr Baker said.

Mr Calligaro, who will rename his Northbridge shop Northside Books in May, said while small bookshops relied on in-store sales, having their own websites was also important.

“As clumsy and as slow as it might be, it’s a real link,” he said.

“There are parallel communities at the moment. There are the people who like to come in and touch things and people who do like the idea of you, but if you haven’t got a shopping cart or a website they won’t bother.

“Even if you’re not selling a lot online, it does have an impact. I don’t know how to quantify it, but it’s extraordinary.”

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