How bookstores can cope with rising rents
Rising rent is one of the biggest reasons that bookstores lose their leases. I feel very conflicted about this. On the one hand, I love books and bookstores, and I hate the idea that as business districts improve, property owners jack up their rents to levels that bookstore owners (who operate on razor thin margins) can’t afford. I don’t like seeing long-term businesses like bodegas and bookstores in my neighbourhood being replaced by stores that sell six-dollar salted caramel lattes and five-hundred dollar watches. On the other hand, I feel property owners have a right to make money like anyone else, and they may well have spent years barely breaking even on their properties. Why shouldn’t they benefit from the growing economy and increase their rents? Also, I have to admit, I do enjoy a salted caramel latte every now and again.
Bookstore owners are book lovers too, of course, but the good ones (and the survivors) are business people first. They might not like the idea of property owners hiking their rent, but they get it: it’s business, not personal. They understand that in order to survive, they need to find a way to cope with a rising rent environment and develop strategies that will benefit them and their landlords.
Shelf Awareness, which publishes a newsletter for people in the book business, recently published a great series of articles on how Booksellers Navigate Rising Rents.
There are seven articles, each of which tells a different bookstore’s story, and each of which has at least one good lesson for people who run bookstores or would like to get into the business. The articles are indexed on a collection page, and there is a summary article detailing some of these booksellers’ tips.
I thought the pieces provided a great toolkit for anyone looking to open a brick-and-mortar store of any kind. I’ve never done anything like that myself, but I’ve met and interviewed many people who have, and these stories resonated really strongly with me.
Here’s my list of takeaways:
1. Build a strong community support network. Locals who love what you do will advocate for you with the landlord. You never know how much influence they may have with the landlord, collectively or individually.
2. Develop a positive partnership with your landlord, communicate often and manage the relationship constantly, to be sure that there are no surprises between you.
3. Insist on complete transparency in negotiations, on both sides.
4. Know everything about the location that you are in, or planning to occupy. Not just the terms of your lease, but of the landlord’s ownership, which may affect you.
5. Make your partnership with the landlord as personal as possible. Avoid (if you can) partnering with a faceless corporation that is only interested in the bottom line.
6. Understand that your landlord may not really understand your business: prepared to explain the idiosyncrasies of the book trade.
7. Don’t try too hard. If the landlord is adamant about hiking rents to a certain level, accept that, and if you can’t make it work for your business, move on.
8. Be flexible with your business model: find a way to pivot to profit without losing sight of your core values and business model, like selling books.
9. Be creative with lease structure if you can: have conversations with your landlord about payment in kind and tailoring payments to meet the realities of your business.
10. My favourite, and a rule for life generally: Beware the ‘good deal’, which may come (dare I say ALWAYS comes?) with hidden costs.