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Re-inventing the indie bookstore — Menlo Park store tries hybrid business model

By Ileana Najarro | 18 Dec 2012

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Kepler’s Books in Menlo Park reopened this fall after closing for a few months to establish a two-pronged business model: a for-profit bookstore with a nonprofit events arm. (Photo: Erchi (Archer) Zhang/ Peninsula Press)

Independent bookstores in California are no longer just brick and mortar shops that sell books. To survive in the digital era, they are re-working their business models to provide something online competitors cannot: an engaging community space with non-profit partnerships.

The past few years of losses sparked the need for a change. Independent bookstore membership in the national trade group American Booksellers Association decreased from 2,400 to 1,900 between 2002 and 2011.

Praveen Madan, CEO of Kepler’s Books in Menlo Park, understands the power of a supportive bookstore community in this day and age.

“The only communities that will end up having bookstores are communities that embrace the idea that they still need a bookstore,” Madan said.

Madan, a former Silicon Valley financial analyst, took over management of the indie store this year when his longtime friend and former owner, Clark Kepler reached out for help. Under Kepler, the store faced losses of approximately $150,000 per year and was due for a final closing.

The store, founded by Roy Kepler in 1955, previously shut down for a month in 2005. Community fundraising efforts helped it re-open, but the latest closure would be permanent.

Madan and his wife were inspired by their frequent visits to Kepler’s to own and operate The Booksmith when they moved to San Francisco from Menlo Park.

A former community member who still valued his old neighborhood store, Madan took action to save Kepler’s.

“Kepler’s was my bookstore, it was where I used to shop,” Madan said.

This summer, Madan and a community volunteer coalition team raised over $750,000 from local donors to re-open and restructure the store.

The coalition team also established a non-profit called Kepler’s Arts and Lectures within the store itself.

Store manager Amanda Hall recalled that well before the 2005 closure, Kepler’s offered a community art space with writing classes, author readings and partnerships with local school book fairs. In fact, before Madan stepped in, Kepler’s already had relationships with over 120 local nonprofits.

“Kepler’s had a non-profit organization buried inside its for-profit walls,” Madan said.

Madan saw an opportunity to sustain and build upon these community relations by reducing the square footage of retail space to designate a corner of the store to events hosted by the new nonprofit.

Madan hopes that in two years, community members will be able to buy stock and own a piece of what he hopes they consider to be their store.

“The idea of the 70s and 80s where there was one bookstore owner who managed, ran and completely oversaw the store for personal capital won’t work in coming decades,” Madan said.

While Kepler’s continues to experiment with new community-driven business models, California peers have already been successfully incorporating community non-profit work into their operations.

The Last Bookstore—a new and used independent bookstore in downtown Los Angeles—opened its doors in 2005 and then re-opened in 2009 in a new location.

Since the first opening, it has partnered with Central City Community Outreach, a non-profit dedicated to after-school mentoring and tutoring for children living in the impoverished Skid Row district just a few blocks away from the store.

The Last Bookstore also splits profits with the nonprofit Books for People, which provides two-thirds of the store’s used book inventory and financially supports Central City Community Outreach in the process.

Katie Orphan, store manager, said non-profit partnerships as an integral part of a bookstore’s future.

“I think the future of bookstores is to embrace what they are able to provide that Internet bookstores and e-books are not and that’s a community space, that’s the ability to partner with people,” Orphan said.

However, not all California bookstores have the resources to look ahead and start incorporating non-profits into business.

First opened in 1940, Chevalier’s Books in the Hancock Park neighborhood of Los Angeles, is a third of the size of Kepler’s and has no relationship with non-profit groups other than providing books for a local high school’s book fairs.

Despite the disadvantage and recent poor sales numbers, the store has survived for over 70 years.

According to owner Filis Winthrop, the store’s familiarity with its community is key to survival.

“Everybody knows us and we know everybody so if there’s any secret, that’s the secret of our staying here and being in business,” Winthrop said.

The store has even adapted its inventory over time to meet demographic changes including offering more performing arts material for the young artists visiting from North Hollywood.

While the future of her store is uncertain, Winthrop is confident that her store’s personalized customer service can keep online competitors at bay.

For instance, according to Chevalier’s staffer Liz Newstat, a customer once came into the store asking for a book that started with “the.” With just that word and her knowledge that The Help had been a big seller in their store, Newstat found and sold the book.

Although Kepler’s manager Amanda Hall also values specialized customer service in sustaining business, she believes that for a modern bookstore to thrive, it needs to work on becoming more than “some transaction for a book”—be that through non-profit partnerships or otherwise.

“We need to stop trying to compete with Amazon and just be our best example of what the bookstore of the next century will be,” Hall said.

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