{"id":1196,"date":"2015-02-03T10:28:42","date_gmt":"2015-02-03T10:28:42","guid":{"rendered":"http:\/\/johnpicacio.com\/onthefront\/?p=1196"},"modified":"2015-02-03T16:56:49","modified_gmt":"2015-02-03T16:56:49","slug":"borderlands-books-is-planning-to-close","status":"publish","type":"post","link":"http:\/\/johnpicacio.com\/onthefront\/2015\/02\/03\/borderlands-books-is-planning-to-close\/","title":{"rendered":"Borderlands Books Is Planning To Close"},"content":{"rendered":"

<\/p> $\"Borderlands4up\"$ <\/a>In a statement released earlier this week<\/a>,\u00a0San Francisco\u2019s legendary bookstore Borderlands Books<\/a> is planning to close in March. This is one of the preeminent sf\/f specialty bookstores in America, and it\u2019s run by two of the outstanding minds we have in the field in Alan Beatts and Jude Feldman. These are smart, shrewd, dedicated people and losing this establishment is a huge loss for all of sf\/f, not just for the San Francisco scene.\n

As one would imagine, there has been a massive outcry, and many have asked if there is any way to save Borderlands from closing down. Alan and Jude have extensive thoughts on this via the Borderlands newsletter, and I\u2019m sharing those below\u00a0the asterisks, but first\u2026..<\/p>\n

EDITORIAL NOTE: As an industry professional, friend of Alan and Jude, and book fan, I\u2019m posting this on my blog because personally, I want to see if a miracle happy ending for Borderlands might materialize by sharing. Unexpected ideas sometimes happen this way. I think Alan and Jude are being pragmatic and professional, making choices on their own terms, despite very tough odds. That\u2019s their right. They\u2019re not looking for handouts. Any omniscient comments that choose to criticize their choices,\u00a0or argue about the politics of minimum wage (for or against), will be deleted because they distract from the point of posting this. Arguments\u00a0about business philosophy\u00a0can be taken elsewhere. This story is about Alan, Jude, and the human beings who work there.\u00a0<\/strong>Post here with\u00a0sensible\u00a0solutions\u00a0and calls-to-action. In that spirit, feel free to share.\u00a0<\/em><\/p>\n

*****************<\/p>\n

How Could Borderlands Stay Open?<\/span><\/em>
\n<\/span>by Alan Beatts<\/span>
\n<\/span>
\n<\/span>Since April of last year, when it started looking likely that a higher minimum wage ordinance would pass in San Francisco, I\u2019ve been thinking (racking my brain, actually) about ways to keep the store open in the face of a 39% increase in wages. \u00a0I\u2019m going to start with what was my final conclusion and then I\u2019m going to go back and touch on several of the other things that I considered.<\/span>
\n<\/span>
\n<\/span>First though, the basic facts:<\/span>
\n<\/span>
\n<\/span>1) \u00a0The bookselling side of Borderlands has never been terribly profitable.<\/span>
\n<\/span>2) \u00a0Based on current business, the new minimum wage, once fully in effect ($15 per hour in 2018) would move the bookstore from being modestly profitable (roughly $3000 in 2013 before depreciation) to showing a yearly loss of roughly $25,000.<\/span>
\n<\/span>3) \u00a0It is reasonable to expect that the best-case, long term sales trend for a brick-and-mortar bookstore is relatively flat.<\/span>
\n<\/span>4) \u00a0Making 50-60 hours of work, per week, with no real holidays on my part an intrinsic part of our business plan is neither viable long-term nor something I am going to do.<\/span>
\n<\/span>5) \u00a0Any solution would need to have a very good chance of working. \u00a0Closing now is a straightforward process and doesn\u2019t require any money and a limited amount of frantic work. \u00a0Pouring money and \/ or time into a solution that might work is not something that I\u2019m willing to do at this point in my life.<\/span>
\n<\/span>
\n<\/span>The only solution that I can see would be to reduce expenses by an amount at least equal to our projected yearly loss. \u00a0The only expense that is large enough to reduce by that much is our rent. \u00a0So, the only viable solution I can see would be to substantially reduce or eliminate the amount we pay to house the store. \u00a0The problem is that I can\u2019t see any realistic way to achieve that. \u00a0If I had the money, I would buy a building, move the store there and stop paying rent. \u00a0It would be a terrible investment, since I\u2019d be losing out on the income from that money, but if I were driven by profits or money, I wouldn\u2019t be running a bookstore to start with. \u00a0On the other hand, I would own a building that would appreciate over time, even in the current over-heated real estate market in SF, so it wouldn\u2019t be a total loss.<\/span>\u00a0<\/span>
\n<\/span>
\n<\/span>However, I don\u2019t have even a fraction of the money that would be required for that. \u00a0Based on the current market and the sort of building we would need, the price tag would probably be somewhere between 1.5 and 3 million dollars. \u00a0So, what it gets down to is \u2014 if someone (or a group of someones) out there wants to buy us a building, I\u2019ll be happy to move the store and stay in business. \u00a0But, otherwise, I cannot see any solution that will allow us an even half-way reasonable chance to make the business work at a minimum wage of $15 an hour.<\/span>
\n<\/span>
\n<\/span>Do I seriously think that someone will buy us a permanent home for the store? \u00a0Not at all. \u00a0I would do it for my store, but I don\u2019t think I\u2019d do it for anybody else\u2019s. \u00a0On the other hand, if I had as much cash as Ron Conway, Mark Zuckerberg or Elon Musk, I guess I might do something like that. \u00a0But, realistically, it\u2019s not going to happen.<\/span>
\n<\/span>
\n<\/span>But, if it did, I would keep running Borderlands \u2019til someone carried me out feet first. \u00a0I really don\u2019t want to close. \u00a0But I can\u2019t see any real, sane alternative.<\/span>
\n<\/span>
\n<\/span>Here\u2019s the list of the not-completely-insane things that I considered (I\u2019m leaving out the old-school-bus-as-bookmobile and other, crazier things). \u00a0I\u2019ll also going to give a thumbnail sketch of the reasons they won\u2019t work.<\/span>
\n<\/span>
\n<\/span>Increase Income<\/span>
\n<\/span>Obviously if we could sell enough books to make up for the higher wages we were paying, that would fix the problem. \u00a0My math says we would need to increase sales by a minimum of 20%. We could increase sales in a couple of ways \u2013<\/span>
\n<\/span>
\n<\/span>1) \u00a0Sell a broader range of books<\/span>
\n<\/span>2) \u00a0Sell more of the books we already carry<\/span>
\n<\/span>3) \u00a0Sell items other than books, with a higher profit margin<\/span>
\n<\/span>4) \u00a0Increase the price of the books we are selling now<\/span>
\n<\/span>5) \u00a0Raise prices at the cafe to make up the short-fall<\/span>
\n<\/span>
\n<\/span>Selling a broader range of books is a problem because; first, we\u2019d have to put a lot of money into inventory. \u00a0Adding our mystery section meant spending around $8,000 on inventory and we didn\u2019t finish the job. \u00a0Since there isn\u2019t another genre of books that would be a good, logical fit with what we sell now, I think we would need to turn ourselves into a general interest shop. \u00a0That would probably cost about $25,000 to $40,000 and we don\u2019t have the money (plus I\u2019d be hesitant to risk that much on a less-than-pretty-sure thing). \u00a0Second, we don\u2019t know the field. \u00a0We\u2019re excellent at SF and fantasy as well as being damn good at horror and mystery. \u00a0But other stuff? \u00a0Nope. \u00a0As a result, we wouldn\u2019t be very good at selling those books, which is a big problem. \u00a0Finally, we don\u2019t have room. \u00a0The store is pretty full now. \u00a0Granted we could cut out some of the stuff that doesn\u2019t sell so well but we don\u2019t have the 20% extra room to increase our sales by 20%. \u00a0<\/span>
\n<\/span>
\n<\/span>Selling 20% more of the books we already carry is completely beyond reach. \u00a0We do a good job at what we do (wouldn\u2019t still be in business if we didn\u2019t). \u00a0Adding our mystery section gave our sales a nice boost because we actually added customers, but otherwise our sales have been pretty steady for years (economic crash in 2009 aside). \u00a0Based on everyone I\u2019ve talked to, increasing sales by 20% without changing locations, adding inventory, or making some other sort of big change just doesn\u2019t happen in the book world (or most any other retail business).<\/span>
\n<\/span>
\n<\/span>Selling things other than books is tricky for several reasons. \u00a0First, what sort of stuff would we sell, exactly? \u00a0It would need to be something that goes, in some way, with books \u2014 otherwise it would just be weird. \u00a0It would have to be simple so as not to add much to our existing workload. \u00a0We already carry things like journals, bookmarks, postcards, and so forth. \u00a0We\u2019ve tried selling DVDs (back when people bought such things) and also jewelry. \u00a0Neither of those things were much of a success at all. \u00a0Second, I\u2019m not sure that idea really works very well for bookstores \u2014 it certainly didn\u2019t work for Borders Books. \u00a0One of their last-gasp attempts to recover their business involved selling all sorts of crap other than books. \u00a0Finally, we got into this business to be booksellers. \u00a0Moving a fifth of our sales to something else isn\u2019t something anyone here is very enthusiastic about. \u00a0Also, like moving towards becoming a more general interest store, there is the problem of tying up a lo<\/span>
\n<\/span>t of money in inventory that might or might not sell.<\/span>
\n<\/span>
\n<\/span>All that I\u2019ll say about increasing our prices is that it\u2019s already hard to get people to pay the publisher\u2019s list price for a book. \u00a0How often have I heard people say, \u201cI\u2019ll just get it cheaper on Amazon\u201d? \u00a0I don\u2019t think that enough people to keep us in business would pay a 10 or 15% surcharge to buy books at Borderlands. \u00a0Of course, we could increase the prices on our used books, but they only represent about 7.3% of our sales, so that could never be enough.<\/span>
\n<\/span>
\n<\/span>I did spend a fair amount of time thinking about increasing the prices at the cafe to make up for the increased wages at the bookstore. \u00a0But the math said no. \u00a0The problem is that I\u2019m going to have to increase the prices at the cafe to make up for the higher payroll at the cafe. It\u2019s not possible to raise the prices enough to accomplish that as well as raising them enough to cover the bookstore. \u00a0We\u2019d price ourselves out of business that way.<\/span>
\n<\/span>
\n<\/span>Reduce Expenses<\/span>
\n<\/span>OK, so if we can\u2019t get more money coming in, what about reducing the money going out? The catch is that, other than payroll and rent, the bookstore has almost no expenses. \u00a0Other than credit card processing (where we have quite a good rate), our highest expense is our PG&E bill . . . which is only about $2000 a year. \u00a0In fact, rent, payroll, and credit card processing represent 68% of all our expenses. \u00a0There isn\u2019t anything left that we could cut to make up $25,000 a year.<\/span>
\n<\/span>
\n<\/span>As a result, the only thing we could cut would be payroll. \u00a0Most of the people who work at Borderlands are part-time, so cutting any single employee doesn\u2019t make much of a dent. Based (once again) on ugly math, to get the store on a balanced financial footing, I\u2019d have to lay off almost everyone on staff. \u00a0Jude Feldman, the general manager, would remain along with one part-time employee. \u00a0Jude would need to work the counter from noon to eight, five or six days a week, while I did all the back office work. \u00a0In other words, I would continue doing the job I do now along with taking on about half of the job that Jude does. \u00a0<\/span>
\n<\/span>
\n<\/span>That option was one that Jude and I discussed a great deal. \u00a0In fact, we went around and around about it. \u00a0And finally we decided that it wasn\u2019t something either of us wanted to do. When it gets down to it, as much as we both love bookselling, it\u2019s more important to us to have reasonably sane, healthy lives. \u00a0We have both worked the sort of hours that I just described. \u00a0In fact, we\u2019ve done it many times over the past 15 years. \u00a0However, all the times in the past we did it to accomplish a specific goal. \u00a0Neither of us are willing to plan on working those hours as a matter of course, just to keep the store open.<\/span>
\n<\/span>
\n<\/span>Other Ideas<\/span>
\n<\/span>We could, of course, move the store out of San Francisco to someplace that doesn\u2019t have as high a minimum wage. \u00a0But, I suspect that the sales we would lose because of moving somewhere with a less dense population and fewer visitors would create a financial problem almost as bad as what we\u2019re facing. \u00a0On top of that, no-one on the staff here (yours truly included) wants to commute a long way to work. \u00a0Last but not least, Borderlands is a San Francisco sort of shop. \u00a0I don\u2019t think it would flourish in deeply alien soil.<\/span>
\n<\/span>
\n<\/span>I considered selling (or closing) the cafe and sub-leasing that storefront. \u00a0In this market, it would probably rent for more than I\u2019m paying right now. \u00a0Of course, it would have to rent for $2000 more a month than I\u2019m paying right now, but even that isn\u2019t out of the question. However, currently my pay comes from the cafe\u2019s income, not the bookstore\u2019s. \u00a0So, if I did something with the cafe, I\u2019d have to figure out how to get my pay from the bookstore\u2019s income. \u00a0I don\u2019t make much money ($28,000 gross last year), but that\u2019s still a big chunk of money and there is no way that selling the cafe or sub-leasing it could produce enough to make up for the added payroll at the bookstore and my salary.<\/span>
\n<\/span>
\n<\/span>That thought led me, for about ten seconds, to the thought that I could go get a job elsewhere that would pay me enough to support myself. \u00a0In that case, my salary from the cafe could go to the bookstore and it would cover the payroll costs. \u00a0But, of course, the two problems there are that I would be working one job while still needing to do my job at the bookstore. \u00a0The burn-out there would be something to behold. \u00a0Besides, do I really want to work some other job just so I can keep owning a bookstore where I never have time to be a bookseller? \u00a0Dumb idea.<\/span>
\n<\/span>
\n<\/span>Without going even further down into crazy-land, there is only one other thought that I had. We could sell memberships to the store, ask for donations to keep running, or in some other way offset the added payroll by relying on the kindness, generosity and support of our customers. \u00a0I have two problems with that idea. \u00a0First, Borderlands is a for-profit business that I started with the intention of making money. \u00a0I don\u2019t think that it\u2019s right to ask our customers and community to give me their hard-earned dollars so that I can continue to support myself. If I had made the store a non-profit whose purpose was to promote genre fiction, that would be a different matter but \u2014 that\u2019s not what I did. And so I don\u2019t think that it\u2019s right for me to ask for continual hand-outs so that I can stay in business. \u00a0The second problem that I have is that it wouldn\u2019t work. \u00a0Over the years I\u2019ve seen many stores try many things to remain in business. Asking your customers and community for support wo<\/span>
\n<\/span>rks wonderfully \u2014 as long as it is to accomplish a specific goal. \u00a0But I have never seen a success come from counting on that sort of support to maintain a functioning business over the long term.<\/span>
\n<\/span>
\n<\/span>The last thing I should address is the possibility of selling the store to someone who either has more money to put into it than I or is willing to work the sort of crazy hours I did when I opened. \u00a0Or, I suppose, the possibility of turning it into a non-profit by creating a suitable entity, raising money for that entity, and then selling the store to it.<\/span>
\n<\/span>
\n<\/span>Not going to happen.<\/span>
\n<\/span>
\n<\/span>There is a very fine and chilling SF story by Tom Godwin called \u201cThe Cold Equations\u201d. \u00a0If you\u2019re not familiar with it, you should read it (despite the arguably fair complaint that it depends on good physics and lousy engineering). \u00a0The core of the story is that math leads to conclusions that cannot be argued with, regardless of what seems right, fair or just. \u00a0And the math about Borderlands says that what we\u2019ve been doing won\u2019t work anymore.<\/span>
\n<\/span>
\n<\/span>Everyone at Borderlands has seen a slow, sad spiral that a bookstore goes through when the money just doesn\u2019t work out anymore. \u00a0I\u2019ll bet that many of the people reading this have seen it too. \u00a0It\u2019s heart-breaking and, perhaps worse, it creates a set of memories that overlay the good ones of the store in its prime.<\/span>
\n<\/span>
\n<\/span>It may be hugely arrogant, but I don\u2019t believe that any owner can beat the cold equations that we\u2019re facing. \u00a0When I first discussed our situation with the staff the feeling was unanimous (and, in a couple of cases, very emphatic) that we wanted to close the store with all the care, class and consideration for our customers with which we had run it. \u00a0That is both the reason that the store is not for sale, and also the reason that we\u2019re closing now, long before higher wages drag us down the drain.<\/span>
\n<\/span>
\n<\/span>One footnote before I end this. \u00a0It might seem that my suggestion at the beginning of this essay, that the only real solution to the problem is for someone to give us a building, doesn\u2019t really match up with my opposition to asking for a hand-out so that I can keep running my business. \u00a0Let me clarify that \u2014 if someone wanted to give Borderlands a building to operate out of, I would actually say no because it would be a hand-out.<\/span>
\n<\/span>
\n<\/span>My counter-offer would be that I would be thrilled to set up (or help set up) a non-profit foundation to own and manage a building with the express purpose of housing a bookstore (or bookstores) as a literary and community resource. \u00a0Of course, I\u2019d be thrilled if Borderlands was the first tenant. \u00a0The beautiful thing about that idea is that, regardless of Borderlands\u2019 financial health (or mine), a place like that could serve as a permanent support for bookselling, no matter how much the world and San Francisco changes. \u00a0As I said at the beginning of this post, I don\u2019t think that there is a snowball\u2019s chance in hell that it will happen. \u00a0However, I\u2019m likely to have more spare time on my hands in six months to a year. \u00a0Starting that foundation and seeing if it\u2019s possible to make it happen for some other store might be a good way to spend some time.<\/span><\/p>\n<\/body>","protected":false},"excerpt":{"rendered":"

In a statement released earlier this week,\u00a0San Francisco\u2019s legendary bookstore Borderlands Books is planning to close in March. This is one of the preeminent sf\/f specialty bookstores in America, and it\u2019s run by two of the outstanding minds we have in the field in Alan Beatts and Jude Feldman. These are smart, shrewd, dedicated people […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"Borderlands Books Is Planning To Close","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[104],"tags":[106,105,107],"class_list":["post-1196","post","type-post","status-publish","format-standard","hentry","category-retail","tag-alan-beatts","tag-borderlands-books","tag-san-francisco"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p5te7x-ji","_links":{"self":[{"href":"http:\/\/johnpicacio.com\/onthefront\/wp-json\/wp\/v2\/posts\/1196","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/johnpicacio.com\/onthefront\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/johnpicacio.com\/onthefront\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/johnpicacio.com\/onthefront\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/johnpicacio.com\/onthefront\/wp-json\/wp\/v2\/comments?post=1196"}],"version-history":[{"count":1,"href":"http:\/\/johnpicacio.com\/onthefront\/wp-json\/wp\/v2\/posts\/1196\/revisions"}],"predecessor-version":[{"id":1203,"href":"http:\/\/johnpicacio.com\/onthefront\/wp-json\/wp\/v2\/posts\/1196\/revisions\/1203"}],"wp:attachment":[{"href":"http:\/\/johnpicacio.com\/onthefront\/wp-json\/wp\/v2\/media?parent=1196"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/johnpicacio.com\/onthefront\/wp-json\/wp\/v2\/categories?post=1196"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/johnpicacio.com\/onthefront\/wp-json\/wp\/v2\/tags?post=1196"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}