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Thursday, Mar 28, 2024

Goodwill Finds There’s Still Demand for Bookstores

The closure of 226 Borders bookstores nationwide may not bode well for an already battered retail industry, but the actions of Goodwill Southern California and some local used booksellers indicate it may be too soon to sound the death knell for brick and mortar bookstores. Goodwill has been scouting sites for a combined attended donation center/used bookstore concept with plans to open three to five new stores a year for the next several years. Iliad Bookstore, a 20-year-old used bookstore in North Hollywood, expanded its store from 3,200 square feet to 5,000 square feet in 2009, and has been doing a rousing business ever since. The Burbank-based One Dollar Bookstore leased a 4,000-square-foot Encino store formerly occupied by a Sharper Image Store in November 2009 as a temporary holiday store and didn’t close until this past February when the landlord secured a higher-paying tenant. “We currently operate eight bookstores – all of which are experiencing increasing sales,” said Sasha Itzikman, director of marketing & community relations for Goodwill Southern California. “That is why we are looking to expand our retail operations and looking for space adjacent to retail stores to increase the size of our bookstores.” Goodwill had total gross revenues in 2010 of $130 million; retail sales and in-kind product/merchandise donations accounted for a large percentage of this revenue, Itzikman said. Goodwill Industries International, which has 165 locally operated regional headquarters, of which Goodwill Southern California is one, experienced a 5.8 percent increase in same-store retail sales at its 2,500 retail and outlet stores in the U.S. and Canada in 2010 as compared to 2009, according to Goodwill Industries International. Founded in 1916, Goodwill Southern California operates 66 retail stores, 45 attended donation centers, three multi-service campuses, three WorkSource centers, and is affiliated with 24 job service centers in Los Angeles, Riverside and San Bernardino counties. Ninety-two percent of its budget is used to fund its job training program, which targets the disabled and others who are vocationally disadvantaged. It opened its first combined attended donation center/bookstore in San Gabriel in January 2001, but made the decision last year to roll out a bevy of stores using that concept and to expand its bookstore operations as sales and interest in its used book offerings have grown. Reasons for increase “The economy has definitely played a role in the increased interest in used books,” Itzikman said. “The environmental consumer is also interested in what we are doing because when they purchase a book from Goodwill, they know they are keeping them out of the landfills.” Goodwill Southern California opened two donation center/bookstores last year, one in Temecula and one in Woodland Hills. The Woodland Hills store, a former credit union, has a drive-thru for people to drop off donations. In Los Feliz, the non-profit opened a bookstore adjacent to an existing Goodwill retail store in March. The non-profit also plans to expand its book offerings by opening bookstores at adjacent locations when possible in addition to opening the new combined donation center/bookstores. The non-profit’s retail stores, which offer used clothing, books, furniture and other household items, have been performing well enough that they are seeking out additional sites for those as well, said Mark Einbund, director of real estate for Goodwill Southern California. The plan is to open three to five 25,000-square-foot donation center/bookstores a year and eight to 10 retail stores in the 10,000 square foot range over the next three years, Einbund said. They also plan to double the size of the book section in their existing retail stores from 1,000 to 2,000 square feet, he said. Goodwill is not the only local used bookseller that has experienced an increase in sales over the past two years. ‘Massive increase’ The 100,000-square-foot Iliad bookstore in North Hollywood has experienced a “massive increase” in business, said Ricky Grove, a book clerk at the store. “We are the kind of business, similar to a pawn shop, where people sell us more books during a recession,” Grove said. “On the other side, we are selling more books, because people can buy books more cheaply here.” Grove attributed the increase in sales, not to the recent Border’s closures, but to the disappearance of other independent bookstore chains in Los Angeles, such as the closure of Dutton’s, a locally-based used bookstore chain that closed a few years ago. As for the recent closure of the One Dollar Bookstore in Encino that was originally intended to be only open for a few months during the 2009 holiday season, Todd Nathanson, president of Encino-based illi Commercial Real Estate said, “I think the bookstore concept went over well and they were making sales, but the building’s owner had other interests.” Analysts have largely attributed the problems faced by the brick and mortar stores owned by Borders to competition from online sales and e-books. Borders was slow to market an e-reader, while close competitor Barnes & Noble quickly rolled out its Nook in 2009 as a competitor to Amazon’s Kindle. Barnes & Noble has snagged 20 percent of market share, according to that company’s financials, which is well below Amazon’s 67 percent, but it has helped bolster the bookseller’s bottom line considering e-reader sales now generate more than 6 million quarterly unit sales. Reorganizing For its part, Borders, which filed for Chapter 11 bankruptcy in mid-February, is “aggressively reorganizing,” and doesn’t anticipate closing any more of its remaining 416 stores, said Stefanie Goodsell, a Borders spokesperson. Recent Borders filings have focused on renegotiating leases with landlords at other stores Borders had identified as underperforming stores prior to its bankruptcy filing, according to court documents. The national bookstore plans to announce the elements of its new business model during the second week of April, Goodsell said. While Goodwill’s actions demonstrate faith in brick and mortar bookstores, the non-profit has also benefited tremendously from its online presence. In 2010, Goodwill International generated more than $50 million in revenue from its e-commerce business – $10 million of that from selling books online, said Lauren Lawson-Zilai, media relations manager for Goodwill Industries International. Shopgoodwill.com, the first and only non-profit Internet auction site, had $100 million in sales last year, Lawson-Zilai said. But as Itzikman said not everyone can afford to buy an e-reader or has access to online shopping and used bookstores offer an option not only for them, but for people who prefer the look and feel of real books. And Goodwill has another competitive advantage, it gives its shoppers a reason to feel good about themselves. “When they support our stores, they are supporting the community by getting people back to work,” Itzikman said.

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