The continuing woes of the book industry were underscored today when the US retail chain Borders, which pulled out of Britain last year, said its losses had increased amid sharply falling revenues.
American book retailers, who have been struggling to compete with online rivals and supermarkets, now face the threat of digital books, which have begun to appeal to a wider audience.
In Britain the picture is little better, and investors have begun to put pressure on HMV to rid itself of Waterstone’s, the only remaining large high street book chain.
Borders said like-for-like sales at stores open for more than a year had dropped 6.8% in the second quarter. It made losses of $46.7m (£30.2m), compared with the $45.6m loss recorded in the same quarter last year. Revenue fell 12% to $526m.
US rival Barnes & Noble is also deep in the red, and reported losses of $62.5m for its fiscal first quarter, ending in July.
Borders arrived in Britain in 1998, promising to revolutionise book-buying, and opened a chain of 45 stores. But by 2007, the company admitted it was considering a sale of the UK division. In the summer of 2009, there was a management buyout; the new owners lasted only a few months before going into administration.
Borders sold the stationery chain Paperchase in July for $31m in an attempt to shore up its finances.
The US chain has launched its own website for physical sales and a digital store for e-books to be read on handheld devices; 6% of book sales in the US are now digital. Borders also plans to extend its range of electronic book readers for sale in store – it currently sells six, including a co-branded device with manufacturer Kobo.
The pace of the change in the market was illustrated in July, when Amazon announced that sales of digital books on its US website had begun to outstrip hardback books in volume terms. Between April and June, the company claimed to have sold 143 digital books for its e-reader, the Kindle, for every 100 hardbacks, although it should be noted that many of the titles on the Kindle top ten were selling for as little as $1.16.
The publisher Hachette recently said James Patterson, whose titles include Along Came a Spider, had become the first author to sell more than 1m digital books.
But Amazon has also found itself under pressure and last month slashed the price of the Kindle in response to the popularity of Apple’s iPad and the growing number of tablet computers arriving on the market.
HMV has owned Waterstone’s since 1998 and is fighting to turn the business around. The company is operating on paper-thin margins, last year producing £2.5m of profits on turnover of £500m from its 300 shops – Guardian