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Why The Number Of Independent Bookstores Increased During The 'Retail Apocalypse'

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We've been hearing for years that the independent bookstore business is in rough shape. It turns out that's not entirely true. Paddy Hirsch of NPR's daily business podcast The Indicator from Planet Money has more.

PADDY HIRSCH, BYLINE: Independent bookstores - maybe you remember them - small stores typically owned by a small group of members, oftentimes a family. Usually there's a cat that roams freely. Back in the late '70s, pretty much every bookstore in the U.S. was independent. It was kind of a bibliographic golden age. But then...

RYAN RAFFAELLI: One of the first challenges that they faced was the introduction of the mall chain.

HIRSCH: That's Ryan Raffaelli. He's a professor at Harvard Business School and author of an upcoming study on the independent bookstore business.

RAFFAELLI: So we can think of B. Dalton, Waldenbooks who at one point were literally opening new stores every week throughout the country. And this continues through the '90s when - then in addition to that, you have the big-boxes arise on the scene such as Barnes & Noble and Borders.

HIRSCH: It got tougher and tougher for independent bookstores to stay in business. A big-box store would come to your town. It would have thousands of cheap books. There'd be a cafe with couches. And often it was just a matter of time before the neighborhood bookstore shut its doors. It's hard to imagine how it could get worse for the independent stores. But in 1995, it did get worse. Amazon opened for business. The number of independent booksellers fell 40 percent in five years as people opted to shop online rather than visit a physical store.

RAFFAELLI: And then in 2007, you have yet another shock, which is the introduction of the Kindle, where many analysts are now saying that maybe the printed book is actually also on its way out.

HIRSCH: The end of the printed book - but then something really interesting happens. The number of independent bookstores in the U.S. starts to take off.

RAFFAELLI: From 2009 till today, they've seen almost now a 40 percent increase in their numbers.

HIRSCH: That's right. The phoenix rises from the ashes. According to the American Booksellers Association, there are now 2,321 independent bookstores in the United States. And there are a couple of things that happened to prepare the grind for this recovery. First, when Amazon came along, the independents were decimated, sure. But the corporates - the big-box stores and the chains - they really got crushed. Borders, for instance, went out of business altogether. So that left a gap for the indies to fill.

RAFFAELLI: What you begin to see is a bifurcation of the industry where the indies represent this high experience, a chance for the consumer to engage on a set of very personal dimensions, versus Amazon, which is really about, can I just get something quickly at the cheapest price?

HIRSCH: The thing is, it's not easy to start or operate an independent bookshop. The margins on books are razor thin, and it's hard to find a location in the kind of community that will support a store where rents are affordable. But Ryan Raffaelli says retail developers are starting to look at independent bookstores in a different way.

RAFFAELLI: Real estate developers are actually willing to give deals to some of the independent bookstores because the independent bookstore is a mark of authenticity. You know, we often think about anchors as being - a traditional mall, you want to have a Sears or a J.C. Penney's. But in these city center, local community growth areas where we're seeing actually quite a large expansion, bookstores is actually one of those components.

HIRSCH: Independent bookstores anchoring shopping malls - in other words, the indie bookstore is marching triumphantly into the very place that once threatened to destroy it. They have returned to dance on the ashes of Borders and Waldenbooks. Now, that's a great twist. Paddy Hirsch, NPR News.

(SOUNDBITE OF JERRY WEINTRAUB SONG, "WALDECK") Transcript provided by NPR, Copyright NPR.

Paddy Hirsch