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Vancouver Chapters closing: What does this mean for the big-box books business?

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It was announced last month that the Robson Street Chapters in Vancouver will be closing on June 30, 2015. The "department store for book lovers" has closed stores in various locations across Canada including Toronto's John St., Richmond St. W. and Bloor West locations last year. The Robson flagship store is just another closure to add to Chapters' growing list.

Indigo Books and Music Inc.'s CEO and "chief book lover" Heather Reisman said in a press release that the Robson Street closure is due to a major rent increase. "With a very significant rent increase recently at our Chapters Robson store the new terms are simply untenable for us to stay in that location. An increase of this magnitude would quite simply make this vibrant, profitable store unprofitable," said Reisman. However, Reisman plans to open a new Chapters location in downtown Vancouver to make sure that area of the market continues to be served -- somewhere less pricey no doubt.

Indigo Books and Music Inc.'s annual report for the 2014 fiscal year shows that the company is operating six fewer stores and has continued to lose money. That fiscal year (March 30, 2013 to March 29, 2014) showed a net loss of $31 million.

However, the most recent report for Indigo's third quarter of the 2014-2015 fiscal year shows that revenue has increased by 2.1 per cent or by $7 million from the previous year. This increase comes from the "other" category, which includes unused gift cards and unredeemed Plum Points, totalling $7.8 million in revenue. 

According to a press release from February 3, sales in superstores increased by 5.5 per cent. But this is due to an increase in its lifestyle, paper and toys section, along with the American Girl store-within-a-store in numerous superstore locations. 

With so many store closures and a drastic change in the products sold, it makes readers wonder, does the corporate book business model work?

Chris Brayshaw, owner of Pulp Fiction books in Vancouver does not think so. He says Chapters' business strategy is "significantly flawed." 

"Heather Reisman, by her own admission, said 'we don't really see ourselves as a bookstore, we see ourselves as a department store for book lovers,' and I don't have any confidence in that model," he says.

Brayshaw doesn't think that consumers should have much confidence in the business model either.

Reisman, however, seems to faith in her business practice. She has marked 2015 as the year that her dream of a "cultural department store" becomes a reality. Though, in order for this to happen Chapters is reducing book inventory and increasing non-book goods, like candles and home decor, by 40 per cent over the next two to three years. It said in the 2014 annual report, "The Company's main growth categories are lifestyle, paper and toy sales. This has been achieved through a reduction in the floor space allotted to books, given the erosion of physical book sales, as well as Indigo's ability to carry fewer on-hand quantities of books as a result of a more timely and efficient replenishment process. Indigo continues to adapt and improve its physical stores to support these growth categories." The department store for book lovers will no longer be a bookstore. It will be bringing in more tech and trinkets, putting books at the back of the shelf unless physical sales change.

But do all bookstores need to go this route to make a profit? No.

Brayshaw says that book sales have not really changed for his business. Since opening nearly 15 years ago, Brayshaw was met with success from the start, opening up two more locations to accommodate for his growing clientele. "When I opened the business, it was just me sitting behind a cash desk in a 400-square-foot shop, and I wasn't sure how I was going to do… [W]e were busy right off and it became significantly busier quite quickly. I seem to have in the language of business, the quote unquote 'permission of the marketplace,'" he says. 

Brayshaw has been providing an alternate bookstore business model for years, proving that there is another way to bring in customers than filtering out novels for knick-knacks. "I just saw a whole lot of cultural storm clouds gathering that I didn't really like, and I was curious if I could create an alternate model that provided an alternative to what seemed to be the shiny new world that seemed to be coming down the pipe. People seem to have been interested in an alternate model and have supported both with time and generosity and by showing up and buying stuff."

Brayshaw says that book culture is well and alive in Vancouver, regardless of the flagship Chapters closing. While Chapters might be reducing its physical stock, Brayshaw sees enough people coming into his shops to know that many customers still want to buy print copies of their favourite books.

While Brayshaw says he is not a terribly optimistic person by nature, he is looking forward to the future of independent brick-and-mortar bookselling. "It's basically like a renaissance for print culture," he says.

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