Mall owner backtracks from Amazon bookstore statement
SAN FRANCISCO — A large mall owner has backtracked from a statement that Amazon was about to build up to 400 physical bookstores — but not before those comments shook up the bookselling world and shares of retailer Barnes & Noble.
Late Wednesday, General Growth Properties Inc. (GGP) issued a one-line statement saying the remarks from CEO Sandeep Mathrani were "not intended to represent Amazon's plans."
The brouhaha, only the most recent involving Amazon as it takes its low-cost model into new markets, started when Mathrani mentioned in General Growth's earnings call that, as he understood it, Amazon planned to open more brick and mortar bookstores, with a goal of 300 to 400.
The statement sent ripples across the book-selling world. Shares of Barnes & Noble (BKS), the nation's largest bookseller, fell 9% Wednesday to close at $7.33, reaching a 52-week low of $7.25. Shares then rebounded after hours following General Growth's statement. Barnes & Noble didn't comment.
Amazon (AMZN), which lost 3.8% to $531.07 Wednesday, has also declined to comment.
The Seattle-based online retailer opened its first, and so far only, physical store in November in Seattle. Though its roots were selling books online, it's become a fierce, low-cost competitor in many markets, from electronics to food to streaming entertainment.
Is Amazon planning '300-400' more bookstores?
Booksellers watched the news unfold with interest.
“I’m sure what happened was that someone from the real estate department at Amazon was doing some research, and someone said, ‘If we opened a bunch of stores, would you give us some deals?’” said Kathy Doyle Thomas, executive vice president and chief strategy officer for Half Price Books, the nation’s third-largest bookstore chain.
She didn’t think 400 was a reasonable number, but could easily imagine Amazon opening more bookstores along the lines of its Seattle store in an upscale mall near the University of Washington.
“If Amazon can go in lean and mean, they can make it work,” she said.
Opening bookstores would certainly be easy for Amazon, said Mike Shatzkin, CEO of the Idea Logical company, a publishing consultancy.
“They can stock and promote a bookstore very inexpensively. Inventory would cost them less than it would cost any other retailer,” he said.
ELECTRONICS AT CENTER
John Mutter, editor-in-chief of the bookseller newsletter Shelf Awareness, believes Amazon does plan to expand based on what he hears from booksellers and others in the book world.
“But I don’t think it’s anywhere near what Mathrani said. I think it’s more like a dozen to 15 stores and it would probably be over a couple of years," he said.
In many ways, Amazon’s Seattle outpost is less a bookstore than an Apple store cognate, a way to showcase the company’s electronic device offerings, he said.
“Even though they call it Amazon Books, the centerpiece of the store is the electronics. Literally in the center of the store they have huge tables with Kindles and Fires and Fire TV. The books are sort of around them,” Mutter said.
Others wondered if the combination made sense.
“If that’s what you want to do, hiding in a bookstore is not really a sensible thing. But then again, I’m a book business guy, not a retail guy,” Shatzkin of Idea Logical said.
Whatever their focus, Amazon's Seattle store appears to be thriving. When it opened, Thomas sent staffers to check it out. They found crowds waiting to get in and a store with lots of engaged customers.
“From a retailer standpoint, if there’s a crowd that’s a good thing. When we see a successful store we think, ‘We’re going to open more stores just like that.’ So maybe Amazon is too,” she said.
One positive for Amazon would be that it has distribution centers across the United States. If it opened bookstores close to its distribution centers, restocking would be easy and fast.
“They could refurnish their stock quickly, the next day or sometimes the same day,” said Doyle.
Follow tech reporter Elizabeth Weise at @eweise.