Fopp collapses - is this meltdown?
The British book trade is close to meltdown at the moment, due to circumstances which affect mature bookselling markets across the globe.
Last week's collapse of the Fopp chain has cut off access to the younger, 'cool' market which the chain had cultivated through its brilliant marketing of culty backlist, alongside its core offering of music. The chain's woes were partly due to difficulties in the music business but it had also grown too fast, from 16 stores at the end of 2003 to 81 by the time it went into administration.
Fopp's purchase of 67 Music Zone stores in February was the death-knell. It inherited Music Zone's poor credit record and proved incapable of refinancing itself in spite of the fact that most of the original Fopp stores were doing well. Emma Barnes of Snowbooks said 'They had a great identity. They were interested in edgy contemporary fiction and sold it beautifully.'
British bookshops are being squeezed by the supermarkets on one side and Amazon on the other. Supermarkets offer convenience and low prices, the Internet offers low prices and a huge range. Where does this leave traditional booksellers?
The biggest book chain, Waterstone's, has just turned in rather dismal results, which show that like-for-like sales declined by 4.1% for the year to 28 April. Their acquisition of Ottakar's last year has been handled well, but it does make the chain very big and it seems to be heading towards the giant W H Smith's mid-market territory. Waterstone's is also in the midst of executing a plan to consolidate book orders through their own warehouse. It may save costs but publishers worry that it will also be more risky in terms of getting books to the shops on time.
Borders, in a surprise decision taken by the US head office relating to troubles with the American stores, put the UK and Irish shops on the market in April. There might be a management buyout, but the outcome is still uncertain.
On the independent front, the decline in numbers is inexorable, from 1,562 independents in the UK in 2005, to 1,483 in 2006 and 1,422 now. It looks as though those that survive might be doing better though, as sales through independents have grown by 2% in volume and 10% in value over that period. The 10% is particularly striking, as it suggests that independents are successfully selling books at a better margin, ie less discounted, than before.
But the British book trade is tricky place at the moment and that is making publishers even more cautious. It feeds back into their acquisition policy, making it even harder for new authors to find a publisher who is willing to take a punt on a new author, unless they look like an obvious bestseller.