The news that two giant US booksellers - Barnes & Noble and Border's - were expanding into the UK market sent shivers down the collective spine of the book trade in the UK. Earlier this year, the US-based Border's Books and Music bought the London-based Books Etc chain for a figure rumoured to be about £23 million. A spokeswoman for Border's in the US said the company had no further plans for entry into the UK market beyond the Books Etc acquisition.
Meanwhile, Barnes & Noble's Manhattan headquarters would confirm only that the company was exploring the feasibility of the market in the UK in general and that no decision had been made on whether the company would enter the market. However indications in the UK property market are that the company is already scouting possible locations for stores in Britain. Barnes & Noble is also rumoured to be considering a move on the troubled WH Smith chain. WHS has decided to sell off Waterstone, its most profitable subsidiary, which could provide Barnes & Noble with a means of entry into the UK - and Irish - market. (Ironically, the name of the WHS group's chief executive is Richard Handover.) Barnes & Noble, which has almost 25,000 employees, recorded $2,448.1 million worth of sales in the 1997 fiscal year. It has more than 1,000 stores in the US, including 431 superstores under its own name, along with Bookstop and Bookstar. It also has 577 mall stores, including B. Dalton, Doubleday and Scribners stores, and operates direct mail and publishing arms. Its size dwarfs UK operations such as Waterstone and Dillons.
Border's is smaller but is expanding rapidly, particularly following its acquisition by K Mart in 1992. Founded by two brothers in Ann Arbor, Michigan, in 1971, Border's plans to have 200 stores in the US by the end of next year. Although it has stores in large urban centres, including Chicago and the World Trade Centre in New York, it has successfully targeted suburban markets which had been poorly served by retailers and has pioneered large, warehouse-type bookstores in the US, an area Barnes & Noble has been quick to latch on to. Its acquisition of Books Etc is its first move into the European market, although it recently opened a store in Singapore.
Both Barnes & Noble and Border's are entering a market which is at best stable and at worst sluggish, according to Book Marketing Ltd, a UK-based market research firm specialising in the book trade. The value of the UK retail book market is about £3 billion, of which £2 billion is spent on the commercial book trade. The market has remained relatively stable for the last five years but, despite the entry of supermarkets into the area of book-retailing, the market itself has not increased in size.
There are no recent reliable figures for the value of the Irish book market. 1993 figures indicated that it was worth about $145 million, or about £100 million, but the absence of solid data means that there are some conflicting views of the state of the industry.
"The book market goes in inverse proportion to how well the economy is going," says Mr Padraig O Flaithearthaigh, manager of Waterstone's branch in Patrick Street, Cork. "Books are things people are interested in when times are bad. When times are good, they choose big ticket items. Books come into their own when things aren't quite so rosy."
Meanwhile, Mr Joe Collins, deputy manager of the 15,000square-foot Hodges Figgis bookstore - itself part of the Dillons group - in Dawson Street, Dublin, believes the market is quite healthy, particularly in the area of Irish-published books.
Booksellers must now wait and see if Border's and Barnes & Noble plan to introduce large, US-style stores to the UK and possibly Ireland.
"It's very hard to tell at the moment if Border's will bring in new concepts to the market," says a spokesman for Book Marketing Ltd. "An additional type of store with a warehouse format would obviously be very different to the Books Etc format, but it's not clear if that market is there."
Mr O Flaithearthaigh believes that Ireland may be some way down on the list of Barnes & Noble's priorities if the company decides to build from the ground up, but if it decides to purchase an existing group - and a move on Waterstone, which has seven branches in the Republic and the North, is not beyond the range of possibility - then its presence in Ireland will be a fait accompli.
Like Book Marketing Ltd, he is sceptical about the ability of the Irish market to sustain large warehouse-style operations, with the possible exception of Dublin.
Yet, in the US, Border's has successfully targeted communities with far smaller populations than Dublin or Cork. A spokeswoman for Border's points out that the company operates stores not only in large cities but also in smaller cities and college towns.
Both Border's and Barnes & Noble are noted in the US for their discounting of bestsellers - Barnes & Noble routinely offers 25 per cent off all New York Times bestsellers and 10 per cent off all other hardback books. Border's operates a similar policy. In addition, Barnes & Noble pride themselves on including coffee shops instore, enticing shoppers to stay and browse over a cup of coffee and a Danish.
Retailers on this side of the Atlantic have already introduced services similar to those offered by US booksellers. Waterstone, which now has 108 branches in the UK and Ireland, recently opened a 28,000-square-foot flagship store in Sauchiehall Street, Glasgow. Spread over five floors, it has 350,000 books on its shelves and 150,000 different titles. Its services include a coffee shop and a mobile coffee cart, which moves from floor to floor servicing the shop's reading areas.
A Waterstone spokeswoman said there was "probably concern" at the interest being displayed by the large US operators but Waterstone was not being complacent. Sauchiehall Street is just one aspect of Waterstone's expansion plans. It plans to open 50 smaller outlets, from 2,500 to 4,000 square feet in size, in British market towns and will continue to open new 10,000-squarefoot stores. In Dublin, Hodges Figgis became the first major retailer to include a coffee-shop on its Dawson Street premises, followed by Easons. Both also make extensive use of computers to track stocks.
"Retailing has been going through quite a revolution in recent years," says Gordon Bolton of Eason, who is chairman of the Irish branch of the Booksellers' Association of Great Britain and Ireland. He stresses the importance of computers in the trade, an area in which Hodges Figgis is set to stake its claim this month when it opens a "virtual book-shop" through its new Web site.
"That again is a response to a change in the market, just as the coffee shop was a response to a need we saw in the marketplace," says Mr Collins.
While Mr Bolton expresses the sincere hope that the big US operators will not move into the Irish market - a hope echoed by others in the Irish book trade - he notes that the book business is no different from the rest of retailing in this country and points to the number of non-Irish retailers currently operating on Grafton Street.
The recent arrival in Dublin of discount fashion store TK Maxx - itself the UK arm of the US-based TJ Maxx - and the planned openings by other US operators indicate that further incursions into the Irish market should not be ruled out.
But Joe Collins of Hodges Figgis takes a positive view of any possible incursion by the Americans. "In Dublin bookselling, very little happened for a long, long time," he recalls. "Then the advent of Waterstones into the market increased the profile of books generally. I see it as a positive thing. It brings more people to books."
