Sunday, August 03, 2008

Fat cats spray on Borders territory!

Reading The Bookseller online, and the various other bulletins that I receive from around the publishing world, plus of course reading between the lines, Borders Books seem to be experiencing a lot of problems of late.

It started back at the end of June with the closure of their Croydon store. This was rapidly followed by the closure of Lakeside. Since these were both stores which had agreed to stock my book, I would ordinarily have been quite upset, but in both cases, the books have long since been returned. Borders, unlike some of their competitors, seem to return books which have failed to sell after exactly three months, which does not in my opinion, give them a fair chance, but then that is the company all over, and given my experiences, which I have detailed on here on many an occasion, I cannot say that I am altogether surprised at their difficulties.

These closures appear to be the least of their problems, since there are also changes afoot within the Buying Team, in fact the whole way in which they buy their stock is being re-structured. Three positions are being cut within the eight strong Buying Team, with all existing Buyers being asked to re-apply for their jobs. These changes, from what I can tell, have been brought about by the imminent closure of the company's supply base in Truro, and the decision to instead obtain stock direct from wholesalers, thus reducing book miles. At the moment almost all stock is obtained centrally, via Head Office, with the Buyers acting as the gatekeeppers.

On the surface this re-structuring would appear to be good news, since my book is of course stocked by Gardners, and as I discovered when telephoning most of the Borders and Books Etc stores, hell would have to freeze over before the company would ever consider supplying a print on demand book centrally. While Managers do have the ability to buy direct from local authors through wholesalers and the like, their idea of local is not the same as everyone else's, which seems to be living in the same, or the next town to where the store is based. Even though there a number of their stores within a hour or so's drive of where I live, most of them refused to order copies, and I was disappointed to find that those who did agree to, in most cases either failed to do so, or if they did, just put the books on the shelf and promptly sent them back again!

Trying to get through to the Buying Department on the telephone to see exactly what their policies were proved to be a total waste of time, as most of the time all I got was an answerphone that never called you back. When I finally did manage to talk to a human being, I was given information that contradicted what the stores had already told me, making it clear that the left hand did not know what the right was doing, and that those in store were for the most part clueless as to their own company's policies, and had basically lied through their back teeth, telling me what I wanted to hear just to get rid of me. It is safe then to say that my opinion of this company is not very high.

When I posted some watered down comments to this effect on The Bookseller website, some of the Buying Team read them and took offence, saying that I should show more compassion for them at this difficult time, and that calls from authors were really the last thing that they needed.

While I have every sympathy for those who may be about to lose their jobs (how can I not have when I am in the same position myself), I also feel that they are being rather short sighted. I work in retail myself (and let's not forget that book selling is just that - selling), dealing with difficult customers and awkward situations every day, that frankly I could also do without. But the point is, it is only because of these customers and their problems, that I have a job at all, it is why I am there.

As an author who wishes to have her book stocked in their stores, I am also a customer, and the reason that they are there. Their jobs only exist because of people like me who write books. They should therefore make the time to talk to people like me, and take a leaf from Waterstones book (no pun), who in total contrast, are always willing to talk, if not by phone, then by email, and whose buying policies are easy to understand, and more to the point, easy to obtain. If Borders clearly laid out on their website what their policies and submission procedures were then they would not have to deal with endless calls from the likes of me in the first place!

From what I can tell, a lot of their problems stem from the fact that the majority of their stores are on these out of town sites. People do not go to these sites to buy books, but to get the larger items such as electrical equipment, DIY and furniture. You have to make a special trip to get there and know what you want. Book selling though is about browsing and does not work in the same way. Because they are away from the High Street, they do not attract the passing trade and the lunch time shoppers, who like to browse, since the only people who work on these large sites are themselves shop workers, many of whom are on minimum wage, and simply cannot afford to buy books. Many of them are also part time, and do not get breaks in which to browse in the first place.

All the warning signs appear to be there, and given its problems and the curent economic climate, I would not be a bit surprised to hear of further closures over the next few years, and the eventual demise of this chain, within the UK at least anyway. I hope for the staff's sake that I am wrong. If I am right, as Graeme Neil predicted back in March, Borders loss will be Waterstones gain. Pity then they turned down my own application to work for them. Their loss in turn though will be someone else's gain.

In the meantime, Borders UK CEO Philip Downer has stated in a lettter to The Bookseller, that it is very much business as usual, and that despite the current economic climate and the company's re-structuring, sales remain healthy and strong. The number of events has increased and Borders have achieved their “best ever score on customer service quality”. “Our market share is robust and our ability to drive share of high-profile promoted titles, series and themes continues to be strong,” he said. In other words, they continue to demand high discounts from publishers, refusing to sell anything that does not earn for them at least twice what the author and publisher earn when put together. This may sound cynical, but I have been around this industry long enough to see through the hype and understand the language used. I also know that when you stick your head in the sand, all you see is an arse!

As one publisher commented, the letter did nothing to reassure with regard to the company's future, leaving them with no idea as to what is going on. I suspect if my own company are anything to go by, that the staff at Borders know even less. One publisher commented that “Nobody will be able to finalise Christmas or get next year underway until this is resolved.” This underlies the point that in today's climate no one can think that far ahead, as we do not know from one week to the next where we will be. This is the beauty of print on demand, that it allows you to respond so much quicker; the average commercially published book takes a year or more to go through the different production phases, but a POD book can be out in less than two months. I feel that the industry will have to start responding an awful lot quicker in response to this change, and that in time, print on demand will become the norm. That will certainly change the dyanamics between author, publisher and supplier.

In the meantime, I was astonished to read the other day exactly what Waterstones MD Gerry Johnson earns. It is a lot more than I get, that's for sure! It is nice to know then where the profit from my book sales is going - talk about fat cats!

According to The Bookseller, which seems to be my main source of information of late, Gerry was the third highest paid Director at parent HMV Group last year. Following his promotion to the main board, he earned a basic salary of £234,000, with an annual bonus of £360,000, taking his combined earnings to £595,000 in the year ended 26th April.

HMV Group Chief Executive Simon Fox, received £992,000 in the same year, inclduing a bonus of £498,000; and group Finance Director Neil Bright, earned £717,000, including a £360,000 annual bonus.

Johnsons salary although large by anyone's standards, dwarfs that of some within publishing, no doubt to the irk of book selllers anad authors combined. Reed Elsevier Chief Executive Crispin Davis was paid more than £2 million in 2007; Pearson Chief Executive Marjorie Scardino, took home a total of £2.3 million; John Makinson, head of Penguin, received £1.4 million; as did Kate Swann, head of WH Smith, and Bloomsbury Chief Executive Nigel Newton earned a total of £740,000.
The HMV accounts reveal that Waterstone's sold 75 million books in the year ending 26th April, with books accounting for 29 percent of HMV's total group sales, about £450 million. Over the period Waterstone's improved its sales by 5 percent to £564 million, with profit flat after incurring £1.2 million of start-up costs of the book hub distribution centre.

HMV reported that part of Johnson's bonus, £99,375, related to the integration of the Ottakar's business, of which a payment of £33,125 has been deferred for 12 months. It added that one-third of the directors' annual bonuses earned in the year was deferred for three years and would be payable in shares. Good job he doesn't work for Borders then, as in years to come they wouldn't be worth much!

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