Competition by the Book: The British Are Coming
Chicago's bookstore wars are intensifying. On the heels of the Barnes & Noble superstore invasion comes the only slightly more modest debut of Waterstone's Booksellers, a 21,000-square-foot store with 150,000 books. Waterstone's is set to open around November 7 in a prime location at the corner of Michigan and Chestnut, directly across from Water Tower Place.
Compared to Barnes & Noble, London-based Waterstone's is a relative newcomer to U.S. bookselling: its first and thus far only American store opened last October in bookish Boston. Waterstone's got its start in Britain ten years ago, shortly after founder Tim Waterstone was fired by W.H. Smith, another British bookseller that ironically became Waterstone's parent company about two years ago. Since 1982 Waterstone has developed the chain into a 92-store phenomenon.
The understated Waterstone established a bookselling concept that caters to the heavy book buyer (defined as one who purchases more, than 20 books a year) and spotlights classics and backlist titles instead of pushing the newest best-sellers to drive up volume. Despite its size, Waterstone's operates in a highly decentralized fashion, with each store's staff making the decisions about the books they stock.
Having run out of expansion room on his home turf, Waterstone decided to try his luck in the hyper-competitive U.S. market. "I think our concept was too good to keep on the islands," he says. "We had certain opportunities in Europe, but we believed our biggest opportunities were here in the U.S."
But not all has gone swimmingly with the chain's efforts to integrate itself into the American bookselling business. When Waterstone's opened its Boston outlet less than a year ago in the heart of the tony Back Bay shopping district, the company initially departed from its strict policy of promoting from within and instead hired a store manager who owned an independent Boston bookstore. Waterstone admits the move was a disaster as the outsider proved unable to pick up on Waterstone's particular way of doing business. The manager was let go, and Waterstone's brought over one of its own from Britain, who apparently has put the store on a firmer footing.
Waterstone's is entering the Chicago market at a time when discounting has become common practice in a number of bookstores; it is a sales tactic Waterstone readily admits he dislikes. Both Barnes & Noble and Crown Books heavily emphasize discounting, and Kroch's & Brentano's discounts numerous titles as well. But Waterstone says his Chicago store stands ready to respond to market dictates. For now the plan is to discount New York Times best-sellers by 30 percent and sell everything else--hardcovers and paperbacks--at list price.
Not surprisingly, the competition eyes the store's imminent arrival with a certain mixture of skepticism and concern. Kroch's & Brentano's president Bill Rickman says, "The jury is out on Waterstone's, but the arrival of another bookstore chain is a recipe for a shakeout in this market." Among other things, Rickman wonders how much business Waterstone's can drum up by promoting its wealth of backlist titles: "You have to wonder how elastic the market is for books by Martin Heidegger."
Waterstone claims he will know almost as soon as the Chicago store opens whether it will be successful. If Waterstone's makes it in the Windy City, he hopes to roll out between 30 and 50 more stores across the U.S.--but not too quickly. He says, "I've recommended that we take it very slowly after taking a good look at how we're doing in Chicago." One thing about the U.S. retailing landscape scares the otherwise imperturbable, stiff-upper-lipped Waterstone. "I'm terribly frightened of malls," he says. "We've never opened a store in one."
Avanzare at Ten
Avanzare, the Lettuce Entertain You restaurant that observers agree spawned a nouvelle Italian food craze in Chicago, turns ten years old next month. Any restaurant that survives a decade in this cutthroat market has got to be doing something right. One former Avanzare chef, Paul LoDuca, who now operates his own restaurant, Vinci, believes the key to Avanzare's longevity has been its consistency. He says, "It also has helped to have some stability in the kitchen."
Avanzare's current executive chef, John Chiakulas, was there when the restaurant opened and worked his way around the kitchen to the top spot, which he assumed in 1987. Chiakulas remembers the excitement the menu generated when Avanzare debuted: "The food was different, slicker, more northern Italian, and meatballs were taboo." Ten years later Avanzare is but one of a slew of slick Italian eateries; besides Vinci there are Trattoria Roma, Vivere, Carlucci, Sole Mio, Spiaggia, and more.
With the not inconsiderable Lettuce Entertain You resources to fall back on, Avanzare isn't likely to be done in soon by its competition. But things have changed at the restaurant, and not all of the changes have been for the best. Over the last two years the restaurant has lost a star and a half in Chicago magazine's listings, and the crowd it was known for has fallen on hard times. In its early days Avanzare was a lunchtime hangout for leaders of the then-thriving local advertising industry. But ad budgets have been cut back, the industry has dwindled, and though they still frequent the restaurant, none of the ad titans spend the kind of money at Avanzare that they once did. According to one account some ad-agency execs spent as much as $5,000 each month entertaining clients.
Avanzare's first executive chef, the outspoken Dennis Terczak, who owns the hip Sole Mio restaurant on the north side, maintains Avanzare's dining room has been taken over in large measure by a less-demanding convention trade. He says, "When you come to the big city from elsewhere in the midwest, Avanzare looks good." Terczak also says he worries about the restaurant's failing prey to Lettuce's corporate culture. "Avanzare had a distinct personality when I left," he adds. "But I don't think it has that anymore."
Art accompanying story in printed newspaper (not available in this archive): photo/Caroline Forbes.