Half Price Books on Upward Track
At a time when many bookstores, independents and chains, are struggling, Half Price Books remains on an upward trajectory, adding stores and expanding into new markets. The company opened its first store in 1972 in a converted, 1,000-sq.-ft. laundromat in Dallas, and now operates 113 stores across 16 states. It is the largest family-owned new and used bookstore chain in the United States.
With the exception of old newspapers, Half Price stores buy and sell nearly anything printed or recorded, including books, comics, games, movies and music, from CDs to LPs. The company pays customers in cash for used items.
Kathy Doyle Thomas, executive VP, joined Half Price Books in 1989. Her responsibilities include developing national marketing efforts and managing store expansion criteria and site selection. She also heads the company’s website divisions.
Thomas is chairman of the board of directors of the Retail Advertising and Marketing Association (RAMA) and a dedicated literacy advocate. Chain Store Age spoke with the busy executive about Half Price Books and the state of retailing.
Tell us about Half Price Books’ store format.
Our stores average from 8,000 sq. ft. to 10,000 sq. ft., and are set up like a traditional bookstore.
What about the merchandise — is it all used?
No. About 40% of the stock is new, comprised mainly of overstocks and remainders. The book industry is the only industry where a retailer can send back its unsold merchandise. One of the ways we get new merchandise is by buying back these returns from publishers.
How is business?
Across the chain, we were up about 2% in comp sales in the last quarter. The summer was flat, due in part I think to Borders’ liquidation sales, which hurt a lot of booksellers. I know it impacted us, especially in those locations where we were directly across the street.
How are you finding the real estate market?
There are some great deals out there, and we are taking advantage of the opportunities. Borders going out opened up a lot of shopping centers to us. We have taken a couple of old Borders locations, which averaged about 20,000 sq. ft. We teamed up with the landlord, whereby we take half the space and the rest is rented out to another retailer.
What about existing locations?
We always look at possible relocations, and now we are finding more opportunities in this regard because of all the good deals out there. We have been able to move a bunch of stores that were in the back of a center to upfront on the pad site for cheaper [rent] than on the back site. All of this has allowed us to pick up our visibility in the marketplace.
How many new stores will open next year?
Anywhere from six to 10.
What about mobile commerce?
We have a mobile website. We worked with a small vendor here in Dallas, and it was very affordable. I think this is something that smaller retailers can do — negotiate with vendors. There are a lot of vendors out there that want to get in this space.
What is the biggest challenge for Half Price Books?
It’s the same as it is for all retailers: to make the store experience as great as it can be, from having great customer service to having the right product on hand to enabling easy returns. People want to be entertained, informed and excited when they come into a store.
But similar to consumer electronics, Half Price Books has the added pressure that comes with being in a business where people can easily look up the stock number — or in our case, book title — online. Our challenge is to make people feel inspired in our stores so that they want to come back and not just buy online.
What does the future look like for bookstores?
I think there will always be printed books because a certain segment of the population will want them. But I think the locations will be more along the lines of smaller record stores than the mass-merchandise variety we have now.
What is Half Price Books doing to address the changing marketplace?
For one, we are taking a hard look at where we open stores. In some instances, we may need only three locations in one city, and not five. We are also looking at new markets.
Tell me about the company’s green commitment.
It’s in our genes. We were founded on the concept of reuse and recycling — books in our case. Even our gift cards are now printed on recycled paper. Our environmental commitment extends from the top on down, with participation at all levels. To be successful, all your employees need to buy into it, and you have to keep challenging them. Our associates have shown true ownership in this regard.
How has Half Price Books managed to remain successful?
Part of the reason is that we don’t owe anyone money. We have no debt. We do not open or move a store, buy a new POS system or the like unless we can afford it. We do not leverage anything. We invest our profits back in the business and try to do the right thing for our employees.
Also, we offer a unique product mix that is hard to replicate.
You are very active in RAMA. What do like best about it?
The people. It’s a wonderful experience, especially if you work for a smaller company, to be around other retailers and discuss common challenges. It’s helped me grow and expand.
Mattress Firm raises $105.6 million in IPO
New York City — Mattress Firm Holding Corp. raised about $105.6 million after pricing its initial public offering at the top of its expected range.
The retailer priced the IPO of 5.6 million shares at $19 each. It had expected shares to sell initially for $17 to $19 each.
Mattress Firm said it will use most of the offering’s net proceeds — about $95 million after expenses — to repay $84.4 million in debt and pay fees to its biggest shareholder, Boston private equity firm J.W. Childs.
The remaining funds will be under for working capital and other general corporate purposes.
Finish Line appoints digital chief
Indianapolis — The Finish Line announced that Chris Ladd will join the company Nov. 21 as executive VP, chief digital officer. Ladd’s responsibilities will include providing vision, leadership and strategy to develop and implement initiatives across the enterprise including digital and mobile commerce, social media and other key components of the multichannel experience.
He comes to Finish Line from Lululemon, a 150-store specialty retailer of yoga-inspired athletic apparel, where he served as senior VP, Global Ecommerce.