The perfect storm

A book’s title rarely tells its own, evocative story. However, Sebastian Junger’s work, The Perfect Storm, does. It tells of a confluence of three phenomena, deus ex machina, that lead to a tragic ending, with the irony of the back-story being an already dying fishing industry. Junger’s story, of the “Halloween Nor’easter” storm in 1991, tells of the Gloucester fishermen, and of their industry, which no longer exists.

As happenstance would have it, my company acquired an independent bookshop, The Travel Bookshop in Notting Hill, London, just before that nor’easter blew. No one could foresee that this “industry”, too, would one day be engulfed in a perfect confluence of three very different phenomena.

The reason my company— European Enterprises— acquired The Travel Bookshop was pure serendipity: I was a good customer who admired the way the owner Sarah Anderson retailed books. You’d walk in to buy a book on Venice, and leave with three or four titles—and all Sarah had done was organise and display her stock by country, not genre.

Simple ideas are the best. Even today, go into any (remaining) high street bookshop and you’ll find guide books, travel literature, maps and so on, all neatly flagged in different sub-sections of the same generic travel section. What use is that when you’re heading to Venice? None. The Travel Bookshop’s shelves were: Venice—the Links guide was next to a map, and spine-on was an old copy of Don’t Look Now, with a coffee-table book on Canaletto on display. So, I bought far more books on Venice than I had planned, and headed off—not to Venice, but on a rally to Beijing. I returnedfrom China 10 weeks later, and bought the business.

After 32 years, The Travel Bookshop has ceased trading. The genesis of our microcosmic perfect storm—and one that’s engulfing UK booksellers as I write—began about five minutes after the ink was dry on my purchase contract.

1 The initial warm air from the low pressure, which formed over independent booksellers in the UK, was the wilful dissolution in 1991 of the Net Book Agreement. Dillons and Waterstone’s flouted a loophole, which allowed a “defaced” book to be sold at less than its r.r.p. Books were simply spoiled by staff with marker pens, and then reduced in price by 33%. By 1995, the NBA was dead. Today, there is a NBA equivalent in force in almost every EU country, and one even extends to the free market economies of Korea and Japan.

2 The cool, dry air of the opposing high pressure came next, and from both the left and right of the UK’s political divide: a wholesale change of planning laws. In a monumental error of judgement, the high street was sacrificed to out-of-town superstores and malls. Nonessential items, such as forests of discounted books, were needed to fill the acres of MDF of the new giant Tescos, etc. It wasn’t only the independent bookstore that couldn’t compete. The butcher, the baker and the candlestick maker couldn’t either . . .

3 The tropical moisture thrown off by the (e-)hurricane was the third, last and worst phenomena to complete the perfect storm. All the earnest talk of providing a “wonderful customer experience” cannot mask what is a numbers game. One where overheads—in particular absurd Local Authority rates—increase exponentially, just as gossamer-thin profit margins evaporate into ever greater systemic losses.

The EU internet trade was worth €68bn (£60bn) in 2009, and will reach €92bn (£81bn) in 2011. By 2015, the 2009 numbers will have doubled to a phenomenal €134bn (£119bn). Needless to say, the UK leads this trend with 72% of our adult population making purchases online; Amazon being the biggest trader. In its last, gasping months, when trade literally fell off the cliff into the ocean, The Travel Bookshop would buy stock from our competitor Amazon, as a cheaper alternative to book publishers and book wholesalers. Now, just how crazed a business model is that? Our retail habits have changed in the same way that ladies don’t drink port and lemon anymore. We consume more, differently and at a breakneck speed, with our smartphones, laptops, e-books and Amazon’s Kindle.

The Travel Bookshop prided itself on a superb and knowledgeable service, together with a slick online presence. That’s what my staff did for 30-plus years. They advised on holidays, weather patterns, health and safety. Today, it is customers who have decided that they want their advice, their guides, from the ether and the excruciating

For more than 30 years The Travel Bookshop has hosted book launches aplenty. It has fitted out LA libraries, £250m yachts and a private Boeing aircraft—and all at retail prices—but the occasional special project does not pay the weekly overheads. An independent bookseller’s business is his loyal, returning customer. And he/she is voting democratically with their wallets to go elsewhere.

New Waterstone’s m.d. James Daunt is a skilled book retailer; the chain’s owner Alexander Mamut’s only smart business move thus far is securing his services.Yet I rate their chances of turning Waterstone’s around as a profitable business at almost zero. Everybody wants a community-oriented bookshop to work, unfortunately however, that notion will prove to be as vainglorious as King Canute’s was.

The internet, e-books, Amazon’s massive 40%- to 50%-plus discounting, and don’t forget the customer, have all proven, the odious banker-speak phrase of “the business model is broken” to be correct. Sadly, the people who lend umbrellas only when the sun is shining are right this time. The high street retail bookshop business model is bankrupt—or “bank-rot” as they say in Russian