New Dymocks boss says bookstores safe, but eBooks not yet mainstream

New Dymocks managing director Steve Cox says the long-term viability of bookstores is assured despite a “challenging” year for the industry in which overall sales fell by 7%, the biggest player collapsed, and the former small business minister flagged the demise of bookstores within five years.

Cox says the last Christmas sales period was the chain’s best ever, and that 2012 has started strongly, with Dymocks identifying expansion opportunities.

“There are lots of opportunities ahead for us, we’re looking for locations,” he told SmartCompany.

Cox, who has just taken over from long-time managing director Don Grover, says a strategic review of Dymocks is underway. The company owns a grab-bag of assets such as macadamia plantations, food chain Healthy Habits, and a fledgling publishing arm called D Publishing, which Cox says is making “pleasing” progress.

His priorities include rolling out more stores, creating a “seamless customer experience” across the company’s stores and online network, and getting better value from its customer rewards program, which has about 700,000 members.

The retail veteran wants to tap into the knowledge of the Dymocks franchisees, saying customers value staff who are engaged and can inspire them with recommendations.

Acknowledging that last year was a “challenging” one – with market leader REDgroup Retail, the owner of Angus & Robertson and Borders, collapsing in February 2011 – Cox says it did provide Dymocks with scope to expand.

“The changes in the competitive landscape with Angus & Robertson have certainly opened up new opportunities for us as a brand,” he says.

“People love physical books. Whilst last year of course was challenging with such a large change to the market, it presents a tremendous opportunity for the period ahead.”

“We’re a long way off e-books being mainstream,” Cox says.

With two new stores set to open in the next eight weeks, Cox says he’s looking to grow the network in a “sustainable” way, with about 70 locations identified across Australia Dymocks could move into.

With about 20% market share, Dymocks has almost 90 stores across Australia, New Zealand and Hong Kong. The company’s history dates back to 1879 when William Dymocks started selling books in Sydney’s Market Street.

Cox was recruited from within, having joined last year as general manager of buying, marketing and operations, after a retail career spanning David Jones, Specialty Fashion Group, and Selfridges in the UK.

Grover could not be contacted, but his LinkedIn profile says he is the owner of RPS, a strategic consultancy for the retail and property industry.

According to Nielsen BookScan, book sales fell by 7.1% to 60.4 million last year, Nielsen BookScan says, and the value of sales slumped by 12.6% to $1.1 billion.

A report into the book industry late last year found the total value of books sold in Australia in 2010 was $2.3 billion, encompassing both bricks and mortar and online bookshops.

The report recommended cutting the time a local publisher has to decide whether it will publish an overseas book before it can be imported to 14 days. It also recommended dropping the GST on books or, failing that, applying it to online purchases.

Melbourne University Publishing head Louise Adler said at the time that eBooks would rise to be between 6% and 25% of total book sales in Australia by 2014, from about 5%.

“In 2010 over 25,000 people were employed in our industry, 10,000 as content creators, 5000 in publishing and distribution, 2000 in printing, and over 8500 in retail,” she said.

Former Small Business Minister Nick Sherry also provoked outrage by saying: “I think in five years, other than a few specialist booksellers in capital cities, we will not see a bookstore, they will cease to exist.”


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