Independent booksellers across the country took an unprecedented step two weeks ago to stop what they have deemed unfair predatory practices by the biggest of their “big box” competitors: Barnes & Noble and Borders Group.
For Mississippi’s estimated 50 independent booksellers the immediate impact of the lawsuit, filed in U.S. District Court in California by the American Booksellers Association, as well as some 20 other independent operators, is expected to be slight simply because those major players, and their smaller subsidiaries B. Dalton and Walden, don’t have a huge presence in the state.
But Mississippians John Evans, owner of Jackson-based Lemuria bookstore, and Richard Howorth, owner of Square Books in Oxford, will have a role to play in the lawsuit.
Evans’ Lemuria is one of the 20 independent booksellers who has joined the lawsuit, and Howorth is set to become ABA’s next national president at the end of May.
Furthermore, the impending fallout from the lawsuit, should ABA be successful, could have a ripple affect down to one of the state’s dominant large chain bookstores, Birmingham-based Anderson Books, which operates Books-A-Million superstores in Tupelo, Jackson and Hattiesburg, as well as the smaller Bookland stores.
Calls to Books-A-Million in Birmingham seeking comment for this story were not returned and both Barnes & Noble and Borders have issued only brief statements.
Barnes & Noble opened a 25,000-square foot store in Jackson last year and a smaller B. Dalton is located at Northpark Mall, also in Jackson. Books-A-Million opened within the last few years.
The Jackson metro area is just one of many major cities across the country targeted by the large chain booksellers but a perfect model for what is happening in other areas, Evans said. That is one reason he felt it was important to be a party to the lawsuit.
“I fit the mold of what would be a good model in this lawsuit,” Evans said, who opened his bookstore 23 years ago. “I thought the market needed stimulation. Now I think it has saturation.”
Still, he said, the big national players continue to come in and operate at what has to be a loss, with the sole intention of putting independents like him out of business. “We’re trying to level the playing field so that this growth is not funded illegally,” he said.
In effect, ABA’s 50-page lawsuit charges Barnes & Noble and Borders Group with saturating markets and “soliciting, inducing and receiving secret, discriminatory, and illegal terms from publishers and distributors” in order to remain profitable. Combined, both chains have roughly 2,000 stores nationwide and sales of nearly $5 billion.
Those alleged actions, according to the lawsuit, are a violation of the Robinson-Patman Act, a federal statute, as well as the California Unfair Trade Practices Act and the California Unfair Competition Law, according to the ABA. Eight of the bookstore plaintiffs operate in California, and California law makes it illegal for a publisher to secretly allow a bookstore special ‘unearned discounts’ that injure a ‘competitor’ and tend to destroy ‘competition.’
Among the many goals of the lawsuit ABA hopes to stop the alleged illegal action, win damages on behalf of the booksellers and recover legal fees.
ABA is on a roll with challenging the practices of groups it feels threatens the stability of its members. In May 1994 the ABA charged six of the largest publishers with cutting special deals for some of the largest chains. Eventually all six signed consent decrees and the ABA won a $25 million settlement with another $2 million to pay for legal fees. Half of that settlement is being returned to ABA’s members for incurred losses and $12.5 million is to be set aside for general advocacy programs, Howorth said.
Does the fact that ABA is flush with cash have anything to do with the timing of the lawsuit against two of the book selling industry’s largest companies?
“Absolutely,” Howorth said but added, “We’re not trying to put all of our money into suing the superstores. Nobody thinks this lawsuit is the silver bullet; it’s just part of the problem.”
And the problem goes simply beyond independents complaining about competition. Besides the fact that it isn’t fair competition, the independents say fewer bookstores means fewer books, which means fewer readers, which means an even more illiterate society.
Howorth makes a few points: In 1985 the United States ranked first in all book titles published. By 1995, that ranking had dropped to fifth. During that same time Barnes & Noble has tripled and Borders has grown six-fold.
While he can point to no specific research, Howorth said the correlation is clear. “With chains you have centralized buying where decisions about what is purchased is controlled by a very few,” he said.
But Borders, in its statement, addressed just that issue, saying, on average, stores carry more than 200,000 different books and periodicals from a wide array of small and independent presses, and give customers access to books otherwise not available.
The statement continued: “Finally, the success of our stores would suggest that we are indeed meeting the needs and wants of customers throughout the country, just as we have since Borders was founded as an independent bookstore on the campus of the University of Michigan in 1971.”
On March 18 New York-based Barnes & Noble released a statement that said the lawsuit had been brought to its attention by the media and that it could not “comment on the details of the lawsuit since we have not been served with any formal documents.”
As of last Tuesday a spokesperson with Barnes & Noble said their position had not changed. He added, “Barnes & Noble follows accepted industry practices in all of its business dealings. Programs that are available to us are made available to booksellers across America.”
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info