Borders Acquires the Assets of Hawley-Cooke Booksellers

On Monday, August 18, Borders Group Inc. announced that it had acquired the assets of Hawley-Cooke Booksellers in Louisville, Kentucky, from owners Graham Cooke, Martha Neal Cooke, William Schuetze, and Audrey Beach Schuetze. Borders plans to shut down both Hawley-Cooke stores for a short time in early September and plans to re-open them as Borders Books & Music stores on September 13. A Borders Books & Music, currently under construction in Louisville, is also scheduled to open on the same day, and a fourth Borders opening is planned for next year.

"I think [the owners decided to sell due to] a combination of factors," said Hawley-Cooke spokesperson Melissa Berstrom. "The changing marketplace played a role, and I think they were always keeping their options open." Berstrom said the owners knew for some time that Borders was planning to open a store in Louisville this September and another in a downtown development, Fourth Street Live, sometime during the summer of 2004. "Anyone in the book business knows that competition is fierce for market share."

In a statement to their employees, the four co-owners of Hawley-Cooke, said, "After spending 25 years involved in a business where writers and artists are celebrated, where the rewards are not simply economic, where customer loyalty is staggering, and where our staff came to work each day offering outstanding customer service for reasons other than a paycheck, we have determined it’s time for us to yield to marketplace realities and leave the selling of books in Louisville to another entity who can do justice to our wonderful customers."

On Hawley-Cooke's Web site, www.hawleycooke.com, the owners explained that they were fans of the original Borders Book Shop in Ann Arbor, Michigan, owned by brothers Tom and Louis Borders, and had established a solid relationship with them. Moreover, for many years, the bookstore purchased most of its books through a book distribution company affiliated with Borders.

A few months ago, the owners approached Borders Group Inc. to see if the chain giant was interested in purchasing Hawley-Cooke, according to Emily Swan, spokesperson for Borders. While taking over pre-existing bookstores is not part of the company's business strategy, it is nonetheless certainly cost-efficient, she noted. In 1997, Borders Group bought Clayton, Missouri's The Library Ltd., which was one of the largest independent bookstores in the U.S.

"This was just an opportunity that came our way," said Swan about the Hawley-Cooke purchase. "We had plans to open two stores in that market…. They had such a solid bookselling business … with really great customer service," she explained, and noted that Borders would be adding a DVD/CD section to the stores.

Berstrom said that Borders will offer all Hawley-Cooke staff employment with Borders.

While it remains to be seen how Borders' continued growth in Louisville will ultimately affect the bookselling market there, at least one independent bookseller is confident about the situation. Michael Boggs, owner of Carmichael's Bookstores, which has two stores in Louisville, told BTW that, although the sale of Hawley-Cooke to Borders was a bit of a surprise, "we've known the two [other] Borders were moving here," he said. "The competitive landscape hasn't changed for us." He noted that Barnes & Noble already has two stores in Louisville, so he has experience competing against a large bookstore chain. Furthermore, the Carmichael's store on Franklin Avenue will be expanding. The store is moving down the street to a bigger location at the end of September, expanding from 1,200 square feet to 2,000 square feet.

Overall, Boggs believes the sale of Hawley-Cooke to Borders might actually benefit his store. Any former Hawley-Cooke customers that feel strongly about buying local, or are anti-chain, will now shop at his bookstores, he said. "I think initially I really found it distressing that Borders bought Hawley-Cooke, because I'd much rather have an independent business here even though they are competitors," said Boggs. "But from a business point-of-view, it will benefit us. People who have a value system that is anti-chain [will come to us]. We are little, but we are a really good store."

Nonetheless, independents elsewhere did not find the news of the Hawley-Cooke sale to be positive and some took exception to the owners' comments on the Hawley-Cooke Web site that stated their decision to sell was due to "realities of the marketplace."

"That's ridiculous," said Roberta Rubin of The Book Stall at Chestnut Court in Winnetka, Illinois. "I don't consider it a reality, at all…. But I am disappointed, it's another independent that bites the dust."

Meanwhile, Ed Morrow of Northshire Bookstore in Manchester Center, Vermont, said the owners' reasons for selling "reflects their perspective. But this should alert the public to the difficulty and stresses involved in running an independent. Because independents are not homogenized, we have extra expenses and burdens, but the public gets variety. That's part and parcel with an open society."--David Grogan