You don’t often get to do an experiment across the entire population of the U.S., but the Borders bankruptcy offered just that opportunity earlier this year. ICv2 notes that bookstore sales, which have been declining for years, rose 7% in the first half of 2011. Why the sharp turnaround? ICv2 attributes it to the Borders bankruptcy and the subsequent liquidation sales.
This was reflected in the September Bookscan top 20 graphic novel list, which included some older graphic novels, including Lucky in Love from Fantagraphics and the Seven Seas manga Dance in the Vampire Bund, that probably got a boost from those last-minute markdowns.
What I take away from this is that books are too expensive. E-books and online sites like Amazon have been eating away at bookstore sales for years, but apparently you can increase sales of print books in brick-and-mortar stores simply by decreasing the prices. Perhaps this is an oversimplified view of the situation, but I honestly can’t think of any other reason why the trend would turn around like that. (OK, there is one: The prospect of scarcity. People who are losing their only local bookstore might be tempted to stock up, but that would only be true in a few areas.)
From everything I’m seeing, sales of e-books continued to climb during that period, which suggests a tantalizing possibility: The market as a whole, print and digital, online and brick-and-mortar, could continue to increase, if only books were cheaper. Publishers set prices based on the cost of production and the profit they want to make, but readers have their own price points—I know I do—and apparently the two don’t match very well.
Comics | In a post subtitled “Why the new biracial Spider-Man matters,” David Betancourt shares his reaction to the news that the new Ultimate Spider-Man is half-black, half-Latino: “The new Ultimate Spider-Man, who will have the almost impossible task of replacing the late Peter Parker (easily one of Marvel Comics most popular characters), took off his mask and revealed himself to be a young, half-black, half-Latino kid by the name of Miles Morales. When I read the news, I was beside myself, as if my brain couldn’t fully process the revelation. My friendly neighborhood Spider-Man was … just like me? This is a moment I never thought I’d see. But the moment has arrived, and I — the son of Puerto Rican man who passed his love of comics to me, and a black woman who once called me just to say she’d met Adam West — will never forget that day.”
I’m going to miss my local Borders. It was pleasant, warm, and bright, with natural wood and comfy chairs. The manga section was in a sunny corner, and it was usually quiet, although it wasn’t unusual to have to maneuver around several kids who were sprawled on the floor reading the books (the tribe known in some quarters as “hobotaku”). The coffee was good, and I always bought three Lindt truffles on the way out—two milk chocolate ones, for my kids, and a peanut butter one for me.
This sign appeared in some other Borders, obviously one with a bitter attitude, and it has engendered quite a discussion over at Consumerist, where commenters are wondering whether it was referring to shoplifting or piracy. I would think it would be hard to shoplift manga, what with the little magnetic tags and all, except that I never saw anyone follow up when the alarm at the door went off. One person claiming to be a former Borders employee does say that “shrinkage” was highest in the manga section. That’s not too surprising, as manga has strong teen appeal and teens have little money but a great deal of creativity when it comes to getting what they want. Reading in the aisles, downloading from the internet, or tucking a volume into a pocket are just three paths to the same destination, and all of them spell doom for retailers (and publishers, for that matter).
And by the way, despite that sign, bargains are pretty hard to come by at Borders these days.
I was exchanging e-mails with Sean O’Reilly, the founder and CEO of Arcana Studio, just before Borders filed for bankruptcy, so when the other shoe dropped, I asked him to talk a bit about how it affects his business. Arcana is a small publisher, and I assumed the bankruptcy would have a big effect on them. What interests me about his response is the importance of the middleman, Diamond Book Distributors, in this case.
As always, I also wanted to talk about the different ways the company gets its books out to readers, and the relative importance of the different channels. Having spent the weekend at C2E2 talking about these different factors, I was interested to hear how they directly affect a single publisher.
Brigid: How much of your revenue comes from each channel—comics shops, bookstores, online sales, digital?
Sean: While digital is an ever-growing market to keep an eye on, that part of the industry is still in its growth phase. The majority of Arcana’s current sales come from bookstores and online – still primarily through Diamond Comics and Diamond Books, Amazon, eBay and of course you can find our product in local comic shops as well. That said, we’ve made a significant turn away from the ‘floppy’ comic market and are concentrating on the graphic novel market. Digital is the next step and we’re working with Comixology, Wowio, Graphic.ly and others.
Comics | A copy of Archie Comics #1, published in winter 1942, sold at auction last week for $167,300, setting a world record for an Archie title and a non-superhero comic. “Archie may have a ways to go to catch the likes of Superman and Batman, his Golden Age counterparts,” said Lon Allen, managing director of comics for Heritage Auctions, “but you can bet that collectors sat up and took notice when this comic brought that price. This amount exceeds the priciest of Spidey and Hulk comic books we’ve sold, which brought in excess of $125,000 each.” [Luxist]
Retailing | REDgroup Retail, which owns the Australian booksellers Borders and Angus & Robertson, has laid off 321 employees at the two chains following the closing of 38 stores. The company entered into administration last month. [ABC News]
Retailing | Borders Group has asked a bankruptcy judge for more time to decide whether to assume or reject its 681 leases, including those for 674 stores. If granted, the extension would give the company until Jan. 12, 2012, to deal with its leases. [Detroit Free Press]
Word is rocketing around the blogosphere that Diamond Book Distributors has suspended shipments to Borders stores because the book chain suspended payments to its suppliers earlier this week. Tom Spurgeon of The Comics Reporter got hold of an internal e-mail from Diamond Vice President of Purchasing Bill Schanes to several executives that says
This email is to confirm reports in the news that Borders is suspending payments to its suppliers, including Diamond. As a result, we have made the difficult decision to stop shipping them and put their account on hold, as of last week, until such time as they are able to resume payment.
Borders has been failing for a while (here’s a great account of what went wrong with Borders at The Atlantic’s blogs), and the chain confirmed on December 30 that it was delaying payments to vendors while it works on restructuring its debt. The next day, Calvin Reid of Publishers Weekly reported that one of the “big six” New York publishing houses had stopped shipping boos to Borders, and he added
Borders carries about $450 million in trade payables on its balance sheet and many publishers are anxiously waiting to see which houses will be paid and which will not be.