This category includes establishments primarily engaged in the retail sale of new books and magazines. Establishments primarily engaged in the retail sale of used books are classified in SIC 5932: Used Merchandise Stores.
451211 (Book Stores)
As did the entire U.S. economy, booksellers struggled during the first years of the twenty-first century. After experiencing healthy growth during the 1990s, in 2000 trade book revenues fell 3.7 percent to $6.54 billion. Sales decreased again in 2001, falling to $6.37 billion, with the industry being particularly hard hit during the fourth quarter Christmas season, which came on the heels of the terrorist attacks of September 11. Revenues rebounded by nearly 9 percent during 2002, but the industry continued to face numerous obstacles in a challenging economy. While the big chains continually shuffled resources to get the most out of their assets, thousands of independent booksellers struggled to hold back the onslaught of the bookstore giants, led by Amazon.com, Borders, and Barnes and Noble.
The retail bookstore industry was dominated by several large chains, including Borders Group, Inc.; Barnes and Noble, Inc.; and Crown Books Corporation. The rest of the market was shared by about 10,000 independent bookstores. Chain stores, many of which opened during the 1970s, were generally located in shopping malls and usually carried between 15,000 and 20,000 of the most popular titles targeted for a broad consumer market. Independent bookstores often carried a greater variety of titles, between 30,000 and 40,000 per store. With 900,000 books in print, independent bookstores often specialized, offering a wider variety of titles than the chain stores for niche markets such as religion, science and technology, hobbies, or children's books.
In the 1990s, chain store operators began opening dozens of "superstores." These large freestanding bookstores carried between 50,000 and 150,000 titles, offered substantial discounts, and provided a variety of customer amenities such as reading rooms and coffee bars. Superstores prompted speculation that independent booksellers would be driven out of business. However, other industry analysts noted that there were similar dire predictions in the 1970s during the rapid growth of mallbased chain stores. While chain stores did siphon business from the independent bookstores, they also greatly expanded the total market. In fact, market research showed that the presence of a superstore increased the local market for books by 50 to 60 percent.
Another type of bookstore also began appearing in the early 1990s. These were multimedia stores that carried books, audiotapes, videotapes, and computer programs. While other bookstores had sections devoted to electronic information media, multimedia stores mixed different media by category rather than by format, placing the printed works of Shakespeare alongside videocassettes of his plays. WGBH Learningsmith stores in Massachusetts were leaders in the area of multimedia bookstores. The company licensed the use of "WGBH" from the award-winning public television station in Boston.
Virtual bookstores also gained popularity in the mid-1990s, thanks to the possibility of online commerce offered by the Internet and World Wide Web. Of these, Amazon.com, was by far the most popular and most successful, offering more than one million titles.
The first bookstores appeared in the American colonies as early as 1640, with Boston becoming a pre-Revolutionary War center for both book publishing and selling. By the time Benjamin Harris, who published the first newspaper in the colonies, opened a bookstore in 1686, there were already seven other booksellers in Boston. By 1700, there were as many as 30 booksellers in the town, which then had a population of about 10,000. Although a fire swept through the bookseller district in 1711, destroying all the bookstores but one, within a few years there were more bookstores in Boston than ever.
In addition to importing books from England, most early booksellers also published them. For example, Hezekiah Usher, who may have opened the first bookstore in Boston in 1642, published Spiritual Milk for Boston Babes in Either England, the famous catechism by Puritan minister John Cotton, in 1656. Bookseller and newspaper editor Benjamin Harris published the first edition of the New England Primer. In fact, book selling as a profession independent of publishing did not begin to emerge until about 1800.
Early bookstores were also more like variety stores than bookstores in the modern sense. For example, Andrew Bradford offered his customers merchandise ranging from feathers to pickled sturgeon. Thomas Fleet, a publisher of children's books in Boston, sold slaves from his bookstore. Moreover, colonial bookstores often carried a remarkable variety of books. In 1766, Boston shop owner John Mein published a catalogue listing more than 1,700 titles. Religion and philosophy dominated the early book trade. The widespread availability of books by John Locke and other philosophers who wrote about natural rights helped set the stage for the American Revolution and booksellers were often among the intellectual leaders of the colonies. However, novels were also popular, including many with highly suggestive titles such as Married Libertine and Suspicious Lovers. Memoirs of a Woman of Pleasure, originally published in England in 1748 and better known as Fanny Hill, also was available in many bookstores.
The first post-Revolutionary War advancement in book selling came in the 1840s, when an American, Richard Hoe, invented the rotary press. The first Hoe presses were able to print 8,000 sheets an hour, which was later increased to 20,000. This technology made possible a mass market for books. It also hastened the differentiation between publisher and bookseller and greatly increased competition. The technology led to the creation of the paperback industry. The first paperbacks were pirated reprints of English novels printed as supplements to newspapers. Eventually they were sold as separate publications.
Bookstores flourished between 1845 and the beginning of the Civil War. However, book selling began to change dramatically about the time the war ended. In the late 1860s, most large publishers were operating their own bookstores in competition with independent booksellers. In addition, publishers began offering volume discounts to large dry goods stores that opened book departments. Volume discounts eventually cut bookstores out of the textbook trade altogether and would remain an issue of contention between publishers and bookstores up early 2000s, especially with the development of chain stores in the 1970s.
Perhaps even more significantly, in the years following the Civil War publishers' agents began crossing the country selling books door-to-door by subscription, taking prepublication orders for delivery direct to the customers. Publishers often sold books direct for less than they sold them to bookstores and even offered to pay for postage. In 1872, Publishers Weekly warned that "The retail book trade cannot live against the competition of manufacturers and either the competition or the retailers must cease to be." John Wanamaker, whose legendary Philadelphia department store was able to undercut bookstores, flatly declared "book selling is a decaying business."
Book Sellers vs. Publishers. The first attempt to organize American booksellers occurred in 1802, when 50 publishers and booksellers met in Philadelphia to form the American Company of Booksellers; that association lasted only four years. In 1872, publishers and booksellers again got together and formed the American Book Trade Association (ABTA). This time they agreed to limit wholesale discounts to no more than 20 percent. However, the public viewed the ABTA as a cartel organized to keep prices high, and newspapers attacked the plan vehemently. Many publishers also failed to live up to the agreement, and the ABTA only lasted five years. In 1890, the publishers formed their own association aimed at forcing bookstores to sell books at a retail price set by the publisher. The publishers agreed that they would continue offering discounts, but they also agreed to blackball stores that violated the "net price" system.
In 1900, six booksellers announced plans to form the American Booksellers Association (ABA) to lobby on behalf of bookstores. The ABA, which held its first convention in 1901, wholeheartedly endorsed the publishers' net price system, since it would eliminate price-cutting by department stores and so-called "book butchers," who bought quantities of discontinued or surplus books and sold them at a fraction of what other bookstores charged. However, in 1890, Congress passed the Sherman Anti-trust Act, designed to prevent unfair restraint of trade. In 1902, Macy's Department Store in New York filed suit under the Sherman Antitrust Act against the American Publishers Association and the American Booksellers Association. Eleven years later, in 1913, the U.S. Supreme Court declared the publishers' actions illegal and let stand $140,000 in damages awarded to Macy'sbya lower court.
A near heroic figure in the case, from the department store's perspective, was E. L. Kinnear. Kinnear was Macy's book buyer who managed to keep the store's book department stocked while the suit was heard, despite being blacklisted by the publishers. She used surrogates as far west as Denver to buy books and secretly ship them to Macy's. Macy's would continue to be a thorn in the side of New York book sellers, according to a Publishers Weekly retrospective: "During the '30s, the great crusade of the retailers was against price-cutting. The department stores were the chief discounters and books were high on the list of loss leaders. Macy's especially was the hated enemy."
The American Publishers Association disbanded in 1914, following the Supreme Court decision. However, the ABA survived and remained concerned with price stability. Publishers Weekly noted that while the Supreme Court made it clear that the publishers had acted illegally, the case also made clear "that unwarranted 'cut prices' are a stupendous merchandizing blunder, if not immoral or illegal." For a while, fair trade laws passed by several states in the early twentieth century allowed manufacturers to established minimum retail prices on trademarked products, achieving the same results the publishers had wanted. The Miller-Tydings Act, passed in 1937, legitimized these state laws by setting aside federal antitrust laws. However, the consumer interest groups eventually won out, and most of the fair trade laws were repealed between 1950 and 1970. Congress eliminated the last of them in 1975.
Book Clubs. The first book clubs, formed in the 1920s, immediately became the target of opposition from retail bookstores. The Literary Guild and the Book-of-the-Month Club were both denounced at the ABA's convention in 1927. By the 1940s, book clubs had become such a concern that the ABA complained to the Federal Trade Commission (FTC) about violations of fair trade laws then in effect. The ABA also complained that publishers were leasing printing plates to the book clubs for low-cost reprints of popular books but refusing the same privilege to members of the ABA. In 1951, the FTC charged several publishing houses with unfair trade practices. The most significant outcome of the case was that publishers were not allowed to require bookstores to adhere to minimum retail prices if book clubs were not bound by the same requirement.
During the 1980s, book club sales did not keep pace with the burgeoning retail bookstore industry. While total book sales grew about 8 percent per year in the 1980s, and retail bookstores nearly doubled, book club sales grew about half as fast. With the increase in bookstore competition, readers often received discounts equal to or greater than the discounts offered by book clubs and did not have to wait for delivery.
By the early 1990s, book club sales were decreasing, and clubs were beginning to change their marketing tactics to emulate successful mail-order clothing outlets. This included greater market segmentation and direct-mail advertising, deeper discounts, and faster service through 24-hour telephone ordering. The Literary Guild was experimenting with a "900" telephone number. Callers to the 24-hour Home Previewline could listen to one or several recordings by popular authors who either discussed their works or read selections. Callers could then order the books they wanted.
Perhaps the most significant change was that many book clubs were abandoning negative-option selling, in which members would receive monthly club selections unless they mailed in an order card saying no. In 1993, The Wall Street Journal reported that the Book-of-the-Month Club planned to begin a new club drawn from millions of former members who quit because of the negative option. More than half of all Book-of-the-Month Club members quit every year.
Chain Stores. The Walden Book Co., which had operated rental libraries, opened its first retail bookstore in Pittsburgh in 1962. Four years later, the Dayton Hudson Corp., a department store conglomerate, opened the firstB. Dalton Bookseller store in suburban Minneapolis, in the nation's first multi-level enclosed shopping mall. Waldenbooks and B. Dalton Bookseller, which became the two largest bookstore chains in the United States, transformed the book selling industry. Prior to Walden-books and B. Dalton Bookseller, bookstores tended to be small, crowded, and situated in out-of-the-way locations. Waldenbooks and B. Dalton Bookseller bookstores positioned themselves in high-traffic malls and created colorful displays that invited the general public to browse. John Pope, then advertising director for B. Dalton, told Saturday Review in 1979, "What we've done is taken the awesomeness out of the book-buying experience." John Dessauer, author of the annual Book Industry Trends, was less complimentary, especially about the selection of titles: "I think of the chains as doing for reading what the fast-food operations have done for eating. You can preach to the chain stores about cultural obligations, but with their economics, they really can't afford to mess with pate de foie gras."
The chain stores, led by Waldenbooks and B. Dalton with hundreds of outlets each, were so successful that by the early 1970s, some industry analysts were predicting the end of independent bookstores. They also predicted that the chain stores would have a harmful effect on publishing. Victor Navasky, writing in the New York Times Book Review, warned that volume-buying chain stores would force publishers to abandon books of limited appeal and focus solely on mass-market best sellers.
ABA executive director G. Roysce Smith countered such complaints in Publishers Weekly, arguing that as long as there were readers for books, somebody would publish them and some bookstore would sell them. The literary, social, or political value of a book would determine its success, he claimed, not the chain stores. Although many independent bookstores closed during the 1970s, often due to chain store competition, Smith also noted that the total market for books was expanding. So even while the market share for chain stores was increasing, there was still a growing market for independent bookstores. Book sections in department stores, especially those located in malls with chain-owned bookstores, suffered more than independent bookstores.
The same fears reappeared in the late 1970s with the growth of discount stores. Crown Books, founded in 1977, was one of the first and most aggressive discounters, selling best sellers for as much as 40 percent off the publisher's suggested retail price. "How to deal with a discounter" was a popular topic at ABA conferences in the 1980s. But by 1988 even discounters were seen as good for business, as the ABA acknowledged the value that competition brought to the bookseller industry. In the organization's report for the Bowker Annual, Allan Marshall, then director of professional development and education, wrote that "sellers of books at retail are enjoying an increasing market share as more and more people are either returning to or discovering for the first time the joys of shopping in bookstores, having originally been introduced to the concept of book ownership through book clubs, direct mail, or discounters."
Censorship. Bookstores were often at the center of controversy regarding censorship, obscenity laws, and the First Amendment guarantee of free speech, which to booksellers also meant the right of adults to read uncensored material. Periodically, especially in the 1920s, 1950s, and 1970s, police departments raided bookstores, arresting clerks and storeowners and confiscating books they felt violated obscenity laws or were otherwise bad for the community, including books on religion and politics. Community organizations also tried to force bookstores to quit selling books or magazines they found objectionable through boycotts, picketing, and occasional violence.
The first federal obscenity law was the Tariff Act of 1842, which made it illegal to bring "indecent and obscene" material into the country. The Comstock Law, passed in 1873, made it illegal to use the U.S. Post Office to distribute obscene materials or information about birth control and abortion. In 1957, the Supreme Court ruled that the First Amendment does not protect pornographic material. In 1964, the Supreme Court specifically ruled that Henry Miller's Tropic of Cancer, written in 1934 and perhaps the most censored book in American history, was not obscene. In Miller v. California in 1973, the Supreme Court ruled that whether something was obscene depended on "local community standards."
The first official notice the ABA took of censorship was conciliatory. Despite the politically motivated book raids of the 1920s, which resulted in the arrest of many booksellers, in 1923 the ABA passed a resolution deploring the sale of "unclean" books. In 1925, the ABA issued a statement opposing publication and distribution of "salacious" books. The ABA sponsored a discussion on censorship at its convention in 1930 but did not change its official position opposing publication and, therefore, approving censorship of "obscene" books.
In the 1950s, however, there was another rash of book bannings inspired by the investigations of the House Committee on Un-American Activities, and the anticommunist crusade led by Senator Joseph R. McCarthy. Libraries and bookstores were forced to remove books such as John Steinbeck's classic The Grapes of Wrath, which was seen as a communist polemic.
The Supreme Court's "local community standards" ruling in 1973 set off another round of police raids and prosecutions for selling obscene books. At its convention that year, the ABA protested the ruling and issued a statement in support of the President's Commission on Obscenity and Pornography, which in 1970 had recommended the repeal of laws restricting the sale of obscene or pornographic materials to adults. In 1973, the ABA also helped form the Media Coalition, an organization of publishers, booksellers, and motion picture producers that circulated information on censorship laws and activities. In Bookselling in America and the World, ChandlerB. Grannis wrote that joining the Media Coalition marked the ABA's full commitment against censorship.
In the 1980s and early 1990s, the ABA became more proactive in its opposition to censorship. Beginning in the early 1980s, the ABA co-sponsored an annual Banned Books Week to draw attention to the many books that different groups were trying to ban or remove from library shelves. The group also filed suit against "minor's access" laws that would force bookstores to remove books from shelves or store displays. Through the Media Coalition, the ABA opposed efforts to declare pornography a form of sexual discrimination.
In 1986, the ABA publicly opposed the nomination of Robert Bork to the Supreme Court because it believed his views on the First Amendment would be detrimental to bookselling. Ironically, some bookstores were accused of engaging in censorship themselves for refusing to stock The Tempting of America, written by Bork.
In 1989, when Iran's Ayatollah Ruhollah Khomeini called for the assassination of author Salman Rushdie, several bookstores, including Waldenbooks, B. Dalton Bookseller, and Barnes and Noble, pulled copies of his controversial book, The Satanic Verses, from their shelves. However, other bookstores used the incident to call attention to the ongoing struggle against censorship by promoting the book, and the ABA took out ads protesting Iran's attempt at intimidation. The chain stores reversed their policies within a few days, in part because of a consumer demand for the book. Two bookstores in the United States were firebombed apparently because of the book, but there were no injuries.
In 1990, the ABA took out full-page ads in major newspapers nationwide to protest censorship of all forms, from the banning of Little Red Riding Hood by a California school system because it was deemed too violent to anti-pornography groups that were trying to force bookstores to stop selling Playboy magazine.
In the mid-1990s, superstores continued to dominate the market, with Borders Group, Inc. the undisputed leader. The market was changing, however, with a new form of competitor rapidly gaining market share—the online bookstore.
Of these, Amazon.com claimed to be not only the largest online bookstore, but the "Earth's biggest bookstore." The company offered 2.5 million titles in its Webbased store in early 1997. With infinite shelf space and no retail rent, overhead could remain low resulting in lower prices to consumers. Conceived by former hedge-fund manager, Jeff Bezos, Amazon.com offered online chats with authors and reader reviews in addition to a superb list of titles. A new service—MatchMaker—was announced in early 1997. Using sophisticated collaborative filtering technology the service would recommend books that customers were likely to enjoy. The Amazon.com model of "sell-source-ship" meant little inventory to buy or track and no returns to publishers. Instead the company ordered products after receiving customer orders.
The surge in online sales forced drastic changes in the industry. In 1996, Encyclopedia Britannica turned to direct mail, television advertising, and its own Web site. In turn, the company completely eliminated its sales force of 550 people. In November 1998 Barnes and Noble acquired Ingram Book Group, a major book distributor, to better serve its online customers. This only exasperated independent booksellers who were fearful that already large chains were getting better deals from publishers and distributors than the smaller stores. In March 1998, the ABA and 26 independent booksellers filed suit against Barnes and Noble and Borders saying the chains received favorable terms and secret discounts not available to all in the industry. The trial was set for 2001.
Independent booksellers were fighting the encroachment of superstore chains and online services. A group of independent booksellers in California protested to the state government in December 1999 that the online services should be collecting sales tax. Not charging sales tax gave the online seller an advantage over brick-and-mortar stores. The group said the law states tax could be collected if the company has a physical presence in the state. They argued that Borders and Barnes and Noble both had stores in California and that Amazon.com had affiliate programs with companies in the state.
Some independent booksellers were turning to the Internet to supplement their sales. Some found it challenging because it was hard to get up and running and some did not have the staff to maintain a site. Online sales accounted for only 3 percent of book sales in 1998, but that number grew rapidly over the next years. Some smaller bookstores, especially those specializing in a narrow field, were getting out of storefront operations altogether and opening up on the Internet.
According to the American Association of Publishers, in 2002 total book sales reached $26.9 billion, a 5.5 percent increase over the previous year. Trade books, which include adult and juvenile hardbacks and paperbacks, generated $6.93 billion, up 8.8 percent from 2001. Adult trade hardback revenues rose nearly 12 percent from the previous year to $2.94 billion. Adult trade paperback sales increased more than 12 percent over the previous year to $2.16 billion. Juvenile hardbound revenues reached $957 million, up 3 percent, and juvenile hardbound sales fell just over 1 percent to $876 million.
Perhaps the biggest change to the retail bookstore industry in the first decade of the twenty-first century was the proliferation of booksellers' presence on the Internet. According to the U.S. Census Bureau's Statistical Abstract of the United States, in 2000, 49 percent of all book purchases were completed via the Internet. Super-store experts Borders and Barnes and Noble had worked extensively to integrate their brick-and-mortar operations with their online presence. Customers might return an online purchase to a store location. Likewise, some stores had options for customers to place an order online in the store.
These nationwide "brick-and-click" companies had the independent sellers lobbying state governments for consistent sales tax assessment. Independent book dealers must charge sales tax on any sales conducted in the state within which their businesses reside. Likewise, the ABA argues, chain bookstores should be required to collect sales taxes on any sales originating in states where they have a physical presence. However, the big chains, namely Borders and Barnes and Noble, create separate business entities to conduct online operations, separated from their superstores, so that state taxes are only collected in the state in which their Internet operations exist. The ABA wanted state governments to recognize brick-and-mortar operations in conjunction with online operations, thus requiring the big chains to charge sales taxes for online sales to any state in which they operate a brick-and-mortar store. To do otherwise, argued the ABA, unfairly puts independent booksellers at competitive disadvantage. The ABA's claim was bolstered in January 2003 when a group of national retailers, including Wal-Mart, agreed to begin charging sales taxes for all online sales.
Barnes and Noble is the largest bookseller in the United States. In 2003 the company operated 620 Barnes and Noble stores in 49 states, an additional 350 stores under the names B. Dalton, Doubleday, and Scribner's bookstores, and barnesandnoble.com. The company posted a net income of $100 million on $5.3 billion in sales in fiscal 2002. Its superstores accounted for approximately 80 percent of the sales. Underperforming B. Dalton closed 66 stores from June 1998 through June 1999. The company is credited with introducing the superstore concept (which Borders embraced) and has also established a significant online presence in an alliance with America Online. Barnes and Noble was founded in 1873 by Charles Barnes and began as a used book business. William Barnes, Charles' son, took over as president of the business in 1902, later selling the firm to C.W. Follett. Leonard Riggio paid $1.2 million for Barnes and Noble in 1971; with the acquisition of Marboro Books in 1979, the company entered the mail order and publishing business.
Once the largest bookstore operator in the United States, Borders has been second to Barnes and Noble since 1992. Borders Group operates more than 1,200 retail stores across the country under the names Walden-books, Borders, and Planet Music (CDs), including 435 Borders superstores. In 1993, Kmart Corporation was the nation's second largest bookseller, owning two of the largest bookstore chains, Walden Book Company, Inc. and Borders, Inc. In early 1994 Kmart combined Borders and Walden into the Borders-Waldenbooks Group. As part of the restructuring, Walden closed 187 underperforming outlets. The downsizing at Walden was in marked contrast to Borders, which experienced rapid expansion and went public after a 1995 buy back of stock by the original Border brothers from Kmart, consolidating its three divisions in Ann Arbor, Michigan. Changes related to the spin-off led to a $211 million loss in 1996. Borders Group continues to focus on its superstores, which average 30,000 square feet. The company posted sales of $3.5 billion in 2002, resulting in a net income of $111.7 million.
Walden Book began as a small rental library in Bridgeport, Connecticut, in 1933 by Larry W. Hoyt, who leased space in a department store. He rented books for three cents per day. By 1948, the company was operating 250 rental libraries and had begun to sell books as well. In 1962, the company opened its first retail bookstore in Pittsburgh. It was named The Walden Bookstore, a reference to Walden Pond, the lake near Concord, Massachusetts, where author Henry David Thoreau lived from 1845 to 1847. The company opened 50 more Walden Bookstores in less than seven years.
In 1969, Walden Book was purchased by Carter Hawley Hale Stores, Inc., parent company to several leading department stores. The store names were changed to Waldenbooks nationwide in 1972, and in 1981, Walden Book became the first company to operate retail bookstores in all 50 states. The company also opened a central warehouse, the first in the industry, and linked all 750 of its stores to a nationwide computer system that tracked sales and inventory. In 1984, Walden Book was purchased by Kmart, then the second largest retailer in the United States. Walden Book acquired Brentano's, a chain of upscale bookstores, the same year. The first Waldenbooks and More superstore opened in Levittown, New York, in 1985. Walden Book opened the first Waldensoftware and Waldenkids stores in 1987.
Borders, which started the industry's return to large, comfortable, well-stocked bookstores with knowledgeable workers, was founded in 1971 by brothers Louis and Tom Borders in Ann Arbor, Michigan. By 1976, they had developed a computerized inventory and ordering system that made their Borders Book Shop one of the most profitable and best-run bookstores in the country. While the industry average for unsold books returned to their publishers was about 40 percent in 1990, Borders returned just 8 percent, despite offering 5 to 10 times as many titles as the average mall bookstore. Borders also sponsored book signings, poetry readings, literary discussions, and storytelling sessions.
In 1985, Borders expanded to Birmingham, Michigan, and Indianapolis, Indiana. When it was purchased by Kmart in October 1992, Borders was operating 19 superstores. Kmart opened three more Borders Book Shops in 1992 and shifted responsibility for its nine Basset Bookstores from Walden Book to Borders. The Basset stores were to become Borders Book Shops in 1993. In 1992, Borders also added espresso bars and larger children's book sections to several stores and opened the first two Borders Books and Music stores, which offered 70,000 musical selections and 9,000 videotape titles in addition to books. The stores targeted the musical tastes of book buyers in the 35 to 54 age group. Kmart opened one new Borders Book Shop and 13 more Borders Books and Music superstores in 1993. Plans were for the new stores to have at least 22,000 square feet of floor space, compared to about 15,000 square feet in the older stores. In July 1995, two labor unions (IWW and UFCW) attempted to organize workers at Borders locations. By the end of the year two Borders stores unionized, but union drives at other bookstores failed.
Chairman Herbert H. Haft and his family owned a controlling interest in Crown Book Corporation, which was founded in 1977. The leading discount bookstore chain, Crown Books sells bestsellers for as much as 40 percent off the publisher's suggested retail price. In 1993, the company operated 247 Crown Bookstores, each of which carried 3,000 to 4,000 titles. In 1990, the company opened its first Super Crown Bookstore, which offered about 30,000 titles; in 1993 there were 32 Super Crown Bookstores. In 1992, the publicly owned company had approximately 2,300 employees and $232 million in sales. In the mid-1990s power struggles in the Haft family created problems within the business. Herbert ousted his son Robert and replaced him with his other son, Ronald. Robert sued and won a jury award of $34 million. Ronald stepped down in 1995, leaving the company in the hands of CEO Steve Stevens.
In mid-1998 Crown Books declared bankruptcy, filing Chapter 11, citing downward sales and losses that continued to mount. Crown broke free of bankruptcy protection in November 1999, with 92 stores in Washington, Chicago, San Francisco, and Los Angeles, down from a high of 179 stores. The company was projecting sales of $190 million for 1999. The company said it would remain a deep discount bookseller, pointing out that their prices were lower than online sellers when shipping costs were taken into account. In the spring of 2000, the company was expected to announce plans for online retailing, new stores, and the remodeling of old stores.
According to the U.S. Census Bureau's Statistical Abstract of the United States, book stores employed 142,000 people, with an annual payroll of $1.7 billion.
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