Tuesday, December 29, 2009

Too cozy to fail?

English degrees become even more useless today, as McNally Robinson Booksellers announced the company is in bankruptcy protection, and have laid off close to 200 employees at their stores at Polo Park and in Don Mills, ON.

Like when McNally Robinson vacated their Portage Place premises a couple of years ago, this certainly comes as sad news (the Polo Park store's awkardly confusing layout notwithstanding). And while it was surprising when I read it this morning (my last memory of the place was the frantic aisles and a long queues of Christmastime), it is much less so after a moment of consideration. The rehabilitation of the former Sport Check location in the basement of Polo Park was obviously not an inexpensive move, involving constructing an entirely new facade and extensive remodelling of the interior. The end result was a branch store with roughly the same floor space as the flagship store located a 10-15 drive away.

This seemed a little too much bookstore for the location. Polo Park is a great for selling iPods, skinny jeans, and cashmere sweaters, but for a store whose market is the established literate classes of the city (and surrounding hinterlands), it's hard to imagine an operation of that scale being profitable there.

Equally unsurprising, is that the compnay's woes are being caused by the internet. CBC Radio spent the afternoon blaming this on more people downloading e-books, or ordering them online. The few individuals I know that have downloading a book online, have done so to assist with hastily writing a school paper. Certainly never to read.

Winnipeg's literary scene has never been better than it has in recent years, thanks in no small part to millions of titles available (for good prices) through the internet. In 2009, people that continued to read books had the printed world at their fingertips, and more access to more books than they would have 20 years earlier. McNally Robinson proves at Grant Park (and apparently Saskatoon) can be profitable and thrive as a compliment to the new amazon.com reality.

The company's troubles come from taking very costly risks at a very bad time to do so. Namely, months before a recession. The unfortunate part for Winnipeg customers, is that the company now has one location instead of two.

***Is Sandy Shindleman suggesting auto workers read books?


Anonymous Anonymous said...

Promote your site or blog on f9book.com

9:15 PM  
Blogger ManitobaPost.com said...

I lost respect for them when they moved from downtown, and have been shopping @ chapters ever since.

10:04 PM  
Blogger Louis Riel said...

a) They should've never left Portage Place

b) They could quite easily sell eBooks and compete in that marketplace as well, if they had vision, leadership and a better internet presence.

12:17 AM  
Blogger James Andrew Jaworski said...

Remember that McNally's first started their business admidst the recession of the early 1980s.

12:48 AM  
Blogger MacD said...

They also opened one in NYC, which I think was bought out...

1:55 PM  
Anonymous Anonymous said...

Its just a bookstore.

3:36 PM  
Blogger Thomas said...

The NYC store now belongs to one of the McNally daughters and her husband, but was initially set up with staff from Grant Park (and possibly Saskatoon).

10:49 PM  
Blogger Thomas said...

I care about downtown as much as the next guy, but re: all this "they should have never closed Portage Place", etc. talk of the past couple of days -- AFAIK, that store was losing money, and that's why it was closed. Simple as that.

That being said, it's ridiculous that a city as big as Winnipeg can't support a single proper downtown bookshop (no, Coles @ CityPlace doesn't count). Or at the very least in Osborne Village.

10:53 PM  
Blogger Prairie Topiary said...

It's terribly sad news, but it's also the result of a spectacular business miscalculation

They must have invested a small fortune to open the Polo Park and Don Mills stores and the fact they have to close both while the paint is barely dry tells us a lot about how poorly prepared they were to weather such things as an economic downturn or, more importantly, the complete failure of their bookstore model in the Toronto market (where they'd host book signings by prominent authors only to have maybe five people show at each).

Paul McNally blames the Internet as one of the main reasons for the company's failure, but if I remember correctly, the Internet was very much around in 2007. One would have thought they'd have given the online market more than a passing thought when they undertook such a huge expansion in a short period of time.

Now they're down to one local store and have had to abandon plans to open an outlet in the new airport terminal, thereby foregoing some pretty significant visibility and sales.

We can only hope they turn things around in the next couple of years so they'll be in a position sometime again to expand, this time with the benefit of hindsight.

11:32 PM  
Blogger SANDY KLOWAK said...

From what I hear, a huge amount of staff at the Grant Park location were laid off as well, so it's not just Polo employees that are hurting.

9:42 AM  
Blogger Spugsley said...

Agreed. The Polo Park store was horribly designed. What a waste.
Their venture into Don Mills was a terrible business decision. But hey, all successful business persons have failures. C'est la vie.

1:50 PM  
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