In the movie “You’ve Got Mail,” Tom Hanks played the aggressive big-box retailer Joe Fox driving the little bookshop owner played by Meg Ryan out of business.
Twelve years later, it may be Joe Fox’s turn to worry. Readers have gone from skipping small bookstores to wondering if they need bookstores at all. More people are ordering books online or plucking them from the best-seller bin at Wal-Mart.
But the threat that has the industry and some readers the most rattled is the growth of e-books. In the first five months of 2009, e-books made up 2.9 percent of trade book sales. In the same period in 2010, sales of e-books, which generally cost less than hardcover books, grew to 8.5 percent, according to the Association of American Publishers, spurred by sales of the Amazon Kindle and the new AppleiPad. For Barnes & Noble , long the largest and most powerful bookstore chain in the country, the new competition has led to declining profits and store traffic.
After the company announced last week that it was putting itself up for sale, Leonard Riggio, Barnes & Noble’s chairman and largest shareholder, who has declared his confidence in the company’s future, hinted that he might make a play to buy the company himself and take it private.
For readers, e-books have meant a transformation not just of the reading experience, but of the book-buying tradition of strolling aisles, perusing covers and being able to hold books in their hands. Many publishers have been astounded by the pace of the e-book popularity and the threat to print book sales that it represents. If the number of brick-and-mortar stores drops, publishers fear that sales will go along with it. Some worry that large bookstores will go the way of the record stores that shut down when the music business went digital.
“The shift from the physical to the digital book can pick up some of the economic slack, but it can’t pick up the loss that is created when you don’t have the customers browsing the displays,” said Laurence J. Kirshbaum, a literary agent. “We need people going into stores and seeing a book they didn’t know existed and buying it.”
Carolyn Reidy, the chief executive of Simon & Schuster, said in an interview that e-books currently made up about 8 percent of the company’s book revenue. She predicted that it could be as high as 40 percent within three to five years.
“E-books are moving faster and faster all of the time, which makes things look harder for bricks-and-mortar stores,” said Mike Shatzkin, founder and chief executive of the Idea Logical Company, which advises book publishers on digital change.
Iris Reeves, a 53-year-old administrative assistant in East Texas, is one of the bookstore holdouts. Nearly every weekend, she and her husband drive 60 miles to the nearest Barnes & Noble for a long browsing session. She buys several paperbacks (thrillers, science fiction and paranormal romance) and he buys nonfiction (with a few auto magazines thrown in).
She has watched with alarm as dozens of bookstores, both independents and chains like Crown Books, have disappeared. Beyond Barnes & Noble and Borders, the only other retailers nearby that sell new books, she said, are religious bookstores.
“I don’t want to lose the option of actually going into a bookstore and handling a book,” Ms. Reeves said. “I like going up and down the aisles, seeing what’s there. If I had my druthers, it would be paper books all the way.”
Whoever ends up in control of Barnes & Noble’s 720 retail stores will have to grapple with the fundamental changes in the industry — and if the shift to e-books continues, prove that Barnes & Noble can be as successful on the digital side of bookselling as it has been for print.
William Lynch, the chief executive, said in an interview on Friday that the chain was retooling its stores to build up traffic, add products like educational toys and games, and emphasize its own e-reader, the Nook.
“We think we’ve got the right strategy,” Mr. Lynch said. “The growth in our e-books business is about nine months ahead of our plan.”
"“I’m in favor of anything that brings traffic in the store. If it’s toys or games that brings a family into the bookstore, then I say fine."
It is a rare moment of uncertainty for the company. In the 1990s heyday of the superstore, Barnes & Noble reigned supreme, expanding its reach rapidly and dazzling customers with an enormous array of books and steep discounts that smaller, independent stores could not match. Mr. Riggio, a tough and innovative figure, was hailed as the most powerful man in the book business.
“As Barnes & Noble grew, there was a lot that was very good for publishers and authors,” said David Steinberger, the chief executive of the Perseus Books Group. “They were energetic, they were aggressive, they were terrific on author events. They were terrific at broadening the selection available.”
But recently, Barnes & Noble has had to contend with Amazon.com, which has led on e-books and whose vast selection of print books is available online. The release of Apple’s iPad in April only increased interest in e-books.
“This company is going to go through a really fundamental existential struggle,” said Peter Osnos, the founder and editor at large of PublicAffairs, an independent publisher. “What you have is this aggregation of factors — the changes in the way book buying is taking place, the general sluggishness of the economy, the management issues at Barnes & Noble. All of those things together create a set of problems which are really quite striking.”
At the expansive Barnes & Noble store in Manhattan’s Union Square, the changes sweeping the company and the industry are on full display. Shelves have been stripped bare to make room for toys and games, as a sign dangling from the ceiling cheerfully announces.
“I’m in favor of anything that brings traffic in the store,” said Ms. Reidy of Simon & Schuster. “If it’s toys or games that brings a family into the bookstore, then I say fine.”
The company is also taking significant steps to capture the digital market. In September, it will begin building 1,000-square-foot boutiques to showcase the Nook in all of its outlets.
Samantha Robinson, a 24-year-old student, paused outside the Union Square store last week, a newly purchased Nook in her hand.
“I’m going to buy as many books as I can on the e-reader, because they’re less expensive,” Ms. Robinson said.
And if she stopped buying print books altogether? “I wouldn’t miss it,” she said.
In a twist straight out of the movies, some publishers speculated that many of the independents that survived the big chains over the last 15 years might be in an unusually stable position. By the American Booksellers Association’s count, there are more than 2,000 independent bookstores in the United States.
“Being small and privately held allows us to be more nimble,” said Chris Morrow, owner of the Northshire Bookstore in Manchester Center, Vt. “Our competitive advantage has been the curation aspect — knowing our customers and picking the right books.
“We still have that competitive advantage,” he added. “Barnes & Noble doesn’t have that.”