The demise of bookstore giant Borders has created positives and negatives for Lexington's most famous bookstore chain.
Joseph-Beth Booksellers, which was founded in Lexington in 1986 but is based in Cincinnati, expects a slow period for its Cincinnati store in the wake of liquidation sales at four Borders locations in that area. But after that slowness wears off, it's a time of opportunity, said Joseph-Beth chief executive Mark Wilson.
"Once the dust settles, not all of that business is going online," he said. "There will be a good percentage that flows through to us."
The demise of Borders was not a concern in Lexington, where its only presence was a store by its Waldenbooks subsidiary at Fayette Mall that closed in 2010. Wilson said those stores typically generated sales of less than $1 million annually, so "the impact in Lexington was extremely minor."
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But the Borders stores in the Cincinnati area probably generated about $15 million total annually, he estimated.
"That's got to go somewhere," he said.
In the short term, the liquidation sales are drawing in plenty of buyers and slowing business at rivals. "They're saturating the marketplace," Wilson said.
Wilson has sent his book buyers to the stores to investigate what titles are left as the liquidation sales have worn on.
"That provides us guidance on what categories are moving quickly and what's not moving," he said. "The books left on the walls are ones that were a bad use of inventory dollars."
The sales are also confusing some customers, he said, as "every person thinks every bookstore is a Borders for some reason."
A couple of months of slow business are expected in the aftermath, he said, but spending should pick up by the holiday shopping season, "which is the right time."
A major unknown, though, is what percentage of Borders' sales will shift to online competitors like Amazon.com (which is based in Seattle but has several fulfillment centers in Kentucky, including in Lexington). Online offerings have pressured booksellers and driven many out of business since the dawn of e-commerce.
The American Booksellers Association, which represents independent bookstores, saw its membership decrease from 4,000 in 1993 to about 1,400 in the late 1990s — a 65 percent decline, said chief operating officer Len Vlahos. The number stabilized and crept back up in 2009 and 2010 to about 1,500 members, he said.
Beset by many of the same pressures, Joseph-Beth, which at nine stores was large by some measures, entered bankruptcy protection last fall.
The company closed four locations immediately, and a fifth wound up auctioned off to liquidators as the bankruptcy auction wrapped up earlier this year. An ownership group affiliated with the management of The Mall at Lexington Green, the site of the Lexington store, outbid Joseph-Beth founder Neil Van Uum and acquired the chain's three stores in Lexington, Cincinnati and Cleveland. Van Uum acquired the chain's store in Nashville.
Wilson, who had been chief operating officer before the bankruptcy, said Borders' demise doesn't remove the pressures that require Joseph-Beth to have "the right focus."
"We have to differentiate ourselves from Amazon," he said. "I look at Amazon as a two-dimensional space. We have the possibility to create an experience that can't be Amazoned."
He cited the company's recent Camp Joseph-Beth event, in which children have day-camp activities at the store followed by a meal with their parents at the store's restaurant.
"That's something that can't be Amazoned," he said. "That's what we need to continue to drive through our business model."