The Bookseller.com

1st December 2008

Anja Sieg is The Bookseller's German correspondent, and international editor of German trade paper Buchreport.

The giants of Germany

13.02.08

Whenever I visit the UK I keep getting asked the same question by publishers and booksellers: "How does bookselling in Germany function?" Up until recently my standard reply would have been: "Very different to the UK, with family-owned bookshops and a number of regional chains setting the tone." But times are changing and never more so than for German booksellers.

For some years high street bookselling has been going through a series of structural changes. The market is increasingly dominated by two powerful companies, Thalia and DBH. Independently-run bookshops, with their limited financial resources, are having a rough ride and most of the regional chains have disappeared from the market, having been swallowed by either one of the big two.

Consolidation is continuing at an alarming pace with hardly a week passing by without the announcement of yet another prominent independent either being sold or going out of business. According to German trade association Börsenverein des Deutschen Buchhandels, the number of member bookshops fell by 263 from 4,356 to 4,093 between January 2006 and 2008. This figure is widely expected to drop well below 4,000 by the end of the year. In a telling move the trade paper Buchreport last year decided to cut down its annual ranking of the largest German bookselling companies from 100 to 50.

While the rise of Thalia had been well documented, the most dramatic upheaval in the industry in recent years was the formation of DBH Buch Handels GmbH, a joint venture between upmarket specialist bookseller Hugendubel and the bookselling operations of Verlagsgruppe Weltbild, a leading German mail order company and publisher. The combined business had an accumu-lated turnover of €675m (£504m) in 2006, relegating market leader Thalia (€478m, £358m) to second place.

Figures for 2007 have not been released, but Thalia and DBH can confidently be expected to each have easily passed the €700m (£525m) barrier, thus increasing their stranglehold on the market. In 2006 they had a combined market share of about 20%. The gap is then huge: ranked third in Buchreport's top 50 is academic bookseller Schweitzer with sales of €135m (£100m).

DBH spent the best part of 2006 reorganising its businesses under one roof. But when it re-emerged in the autumn, it was with a remarkable coup: because Thalia and Karstadt, Germany's leading chain of department stores, could not agree on terms for the running of Karstadt's 52 book departments, DBH quickly stepped in. The deal is currently being investigated by the German competition authorities, but with DBH already advertising job vacancies, the all-clear seems to be a foregone conclusion.