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Book sales are up, but this independent bookstore still feels pandemic’s sting

Posted on: November 25, 2020

St. Paul’s Red Balloon Bookshop celebrated its 36th anniversary Nov. 17, but in a social media post, the Grand Avenue bookstore warned there was a very real possibility it may not be around for its 37th.

Sad but not so surprising, you might think, in a year when the pandemic has pushed countless retailers beyond the breaking point. But maybe it should be surprising; after all, print book sales were up more than 6% through the first nine months of the year, according to NPD BookScan, with books for children and young adults — Red Balloon’s core customers — showing some of the strongest gains.

But that’s the key to understanding why Red Balloon is struggling: Running a successful bookstore is not just about selling books.

“We’ve lost a whole portion of our business,” said Holly Weinkauf, who purchased Red Balloon from the original owners in 2011. “The way we’ve operated for many years not only relies on people coming into the store, regular retail customers, but also hosting large author events where lots of people come and buy their books. We can’t do that right now.”

Weinkauf said the store’s revenue was down about 20% through early November, a decline that reflects the near-total disappearance of author events from Red Balloon’s calendar. There’s nothing like the September 2019 book tour stop by kids’ lit phenom Dav Pilkey, an event that stuffed 2,000 ticket-holding children and adults into St. Catherine University’s O’Shaughnessy Auditorium.

To a lesser extent, Weinkauf said, Red Balloon is also feeling the loss of book fairs hosted by schools and other organizations. Foot traffic in the store is also down during the pandemic.

Online orders, on the other hand, are surging. Weinkauf estimated the volume of Red Balloon’s online orders had increased 1,000% over 2019.

Those orders come at a cost, however. Some of the bookstore’s retail space has been converted to a processing and shipping department, and the extra labor required to fill online orders has contributed to a roughly 10% increase in Red Balloon’s expenses, Weinkauf said.

In a good year, she added, profit margins for an independent bookstore like Red Balloon run 2% to 3%. That means the changes the bookshop has gone through in 2020 are unsustainable, Weinkauf said.

It also adds to the pressure for a strong holiday season. Close to one-third of Red Balloon’s revenue arrives in the fourth quarter of a typical year, but in a typical year the store can also count on three weeks in December when the sales floor is packed with shoppers — an unlikely and unwise scenario during a pandemic.

Weinkauf said Red Balloon is relying on its customers to shop early this season and, if they prefer to order online, to choose their local independent bookseller over Amazon.

“We do our best, but we can’t always have things ready for somebody same day or even next day. It can take a few days. So, it also requires people to hopefully be a little more understanding and patient that there’s not a whole corporation behind this,” she said.

By   – Staff reporter, Minneapolis / St. Paul Business Journal

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