Joseph-Beth files for bankruptcy protection; local store to remain open

ssloan@herald-leader.comNovember 12, 2010 

Neil Van Uum's first and flagship Joseph-Beth Booksellers location is in Lexington Green.

CHARLES BERTRAM — LEXINGTON HERALD-LEADER

  • The history of Joseph-Beth Booksellers

    1986: Neil J. and Mary Beth Van Uum open Joseph-Beth Booksellers, a 6,500-square-foot store offering 37,000 titles, in The Mall at Lexington Green. The store name came from his middle name, Joseph, and her middle name, Beth.

    1987: Store expands to 10,000 square feet and 62,000 titles.

    1989: Citing sales volume, Joseph-Beth moves to another spot in Lexington Green; the store grows to 15,500 square feet with more than 70,000 titles.

    1993: Joseph-Beth adds a 74-seat restaurant: The Cafe at Joseph-Beth. Also, the company opens a 23,000-square-foot store with a 75-seat cafe in Rookwood Pavilion in Cincinnati's Norwood neighborhood; both Van Uums graduated from the University of Cincinnati.

    1995: Second Cincinnati store opens at Harper's Station in northeast part of city; store has 30,000 square feet. In Lexington, the store is at 25,000 square feet due to two expansions.

    1996: Joseph-Beth moves into the two-story atrium at the middle of The Mall at Lexington Green; this nearly doubles the store's space, to 47,000 square feet.

    1997: Lagging sales forces closing of Harper's Station store in Cincinnati, 18 months after it opened. Also, the company buys Nashville's respected Davis-Kidd Booksellers, which had been Joseph-Beth's model. Davis-Kidd also owns stores in Memphis, Knoxville and Jackson, Tenn.; all four stores continue under Davis-Kidd name.

    1998: Barnes & Noble, the nation's largest bookseller at bricks-and-mortar locations, opens its first Lexington store, a 25,000-square-foot site in Hamburg, off Man o' War Boulevard.

    1999: Neil and Mary Beth Van Uum divorce; Neil Van Uum buys out his ex-wife's interest and becomes sole owner of the Joseph-Beth Group Inc., with headquarters in Cincinnati.

    2000: Store opens in Cleveland's historic Shaker Village, fulfilling Neil Van Uum's dream of owning a store in his hometown.

    2003: Cleveland store, with the Bistro Joseph-Beth, moves to Legacy Village in the Lyndhurst suburb. Also, Davis-Kidd's Knoxville store closes because of small size (9,000 square feet) and poor location.

    2004: Joseph-Beth opens in Pittsburgh's SouthSide Works, a retail/dining/entertainment district on the waterfront of the Monongahela River.

    2005: Joseph-Beth opens in upscale SouthPark Mall in Charlotte, N.C.

    2006: Davis-Kidd store in Jackson, Tenn., closes at end of lease; Van Uum says it was a "break-even" store.

    2007: Joseph-Beth embarks on a complete physical makeover of its 42,000-square-foot store in Lexington Green; Van Uum says the store will reinvigorate its book inventory and renew its emphasis on customer service and a cozy ambience.

    2010: In January, Joseph-Beth opens the Joseph-Beth Health & Well-Being Store at the Cleveland Clinic with a selection of books, gifts, health foods and healthy living products. In May, the company opens a store in Fredericksburg, Va.

    Herald-Leader staff report

  • Joseph-Beth's stores

    Staying open: Lexington, Cincinnati, Cleveland Clinic location in Cleveland, Fredericksburg, Va., and a Davis-Kidd Booksellers store in Memphis.

    Closing: Charlotte, Pittsburgh, Legacy Village location in Cleveland and Davis-Kidd store in Nashville.

Amid a slowly recovering economy and a proliferation of online competition, the parent company of iconic Lexington bookstore Joseph-Beth Booksellers filed for bankruptcy protection Thursday.

The chain, which consists of seven Joseph-Beth Booksellers and two Davis-Kidd Booksellers, will close four poorly performing locations. Going forward, President Neil Van Uum said the company will focus on its best stores, including the flagship Lexington location that was the company's first in 1986.

"We're going to focus on those and make them better," he said, adding he expects Lexington, his "big dog" and "lead store," will see no changes except "if anything, a heightened focus."

No employees will be laid off at stores that are being kept open, he said.

Van Uum said the bankruptcy's roots came in the summer when the company began "to run a little bit sideways" on some of the terms of its loans.

"I recognized we needed to do something," he said.

While the company's bankruptcy protection doesn't specify its exact debt, its top 30 creditors are owed more than $5.8 million. The majority of that — $3.55 million — is owed to book company Ingram.

The bankruptcy will allow the company to continue normal day-to-day operations at its remaining stores until it can close its under-performing locations and emerge from protection in roughly three to four months, Van Uum said.

Closing dates for the four have not been determined, according to a company statement.

Behind the bankruptcy

Van Uum said the bankruptcy traces to a number of factors, including the tattered economy and increasing Internet sales. The chain has seen declining sales for the last five years.

"I think in the next three to five years, you'll see half the bookstores in this country close," he said.

Barnes & Noble, the country's largest bookseller, put itself up for sale in August and has struggled for years with declining sales. It's pinned hopes on initiatives including its Nook electronic reader.

"There's a lot of fixed overhead in the book business, especially with stores as complex as ours," Van Uum said.

He said the company had expanded in hopes of duplicating Lexington's success in other markets, but "we haven't been able to get to that institutionalized stage we have in some of our core markets...

"We spent a lot of time and energy to get stores that weren't performing to perform," he said.

Lexington reaction

News of the bankruptcy filing disappointed the Lexington business community on Thursday.

"You've got to feel for them," said Bob Quick, president of Commerce Lexington. "They're iconic here...

"When our family comes in from all over the country, the first place they want to go to is Joseph-Beth."

Hap Houlihan, manager of The Morris Book Shop on Southland Drive and a former Joseph-Beth employee, said the company expanded too far outside its geographic core.

"It didn't matter that they were great bookstores," he said. "They just didn't have the oomph to compete with the (Barnes & Nobles) of the world."

Regarding the Lexington store, he said, "it is safe to say it will be their last no matter what happens in the future."

As its largest tenant, that store is also vital to The Mall at Lexington Green, which will be undergoing a renovation in the spring.

Doris Benson, president of Langley Properties and a partner in Lexington Green, said she expects Joseph-Beth to "be back bigger and better than ever with the reorganization."

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