Are local bookshops on the way out?

Are e-books and international franchises too much for local bookstores to contend with?

Dubai , United Arab Emirates- May 07, 2011: Magrudy's Book Shop at the Festival City in Dubai . ( Satish Kumar / The National )

DUBAI // The closure of a third Magrudy's store last week has book-lovers in the country wondering if the story of paperbacks has entered its final chapter.

The branch at the Ibn Battuta Mall was shut from May 1, after a decision not to renew its lease that expired on April 30. The UAE-based bookstore said high rents and a decision to put quality before quantity were the reasons for the closure.

"The publishing industry worldwide is undergoing a sea change," said Isobel Abulhoul, a director and co-founder of Magrudy's.

"We want to focus on developing a better range in fewer shops. We are quite stretched in skills and services, and it is difficult to deliver uniform services in all the stores. We are more in control now.

"The rents were not sustainable at the Dubai Mall. People who sell books do it for the passion and love for books. If rents are too expensive for turnover, we have to make a business decision," Ms Abulhoul said.

The 36-year-old bookseller previously downed the shutters on stores in Deira City Centre and the Dubai Mall in February.

"The lease had ended with Deira City Centre and Ibn Battuta. We had a chance to renew, but unless malls have an offer we can't refuse, it is difficult."

In March, Magrudy's decided against renewing the contracts of six retail concessions within Spinneys stores, which were taken over by the Jashanmal Bookstores.

Magrudy's outlets in Dubai Festival City, Jumeirah, Al Wahda Mall in Abu Dhabi and Al Bawadi Mall continue to operate. There are no plans to close more stores.

In the past five years, international chains such as the US-based Borders and the Japanese giant Kinokuniya have established a strong presence in the Emirates, increasing pressure on local bookstores.

However, Ms Abulhoul says the rivalry is beneficial. "Competition is good. International brands bring a level of expertise. That is good for the market. If we can't sustain, something is wrong with our model. Every business needs to adapt to survive," she said.

According to the manager of one international bookstore franchise, however it is "natural" and inevitable that international chains will have an impact on local book retailers.

"If there are more stores, there are more options," said Mahendra Malhotra, general manager of Borders in the UAE, an Al Maya group franchise with seven outlets in Dubai.

In February this year, the international group filed for bankruptcy in the US and announced it would close up to a third of its stores.

Some outlets in the Emirates closed, but the company said this had little to do with the problems facing its American counterpart, and that business in the UAE continued to grow.

"E-readers have grown quite a bit. But there are not as many e-readers in the UAE and that is why our books are selling. We have bigger stores and higher volumes. Our pricing is quite competitive," Mr Malhotra said.

Even if shopping in a bookstore remains popular in the Emirates, technological innovations such as the iPad, Kindle and Samsung Galaxy Tab are expected to throw up challenges to conventional trade.

Jashanmal Bookstores has begun moving part of its business online in an attempt to adapt to evolving market trends. About 5,000 titles are available through souq.com. Buyers can opt for home delivery or collection from a store.

"We plan to expand this to 15,000 titles by June," Narain Jashanmal, the store's general manager, said.

He said there would always be demand for physical books. "After a decade of digitisation and piracy, the face of the music industry has changed. However, 50 per cent of all music sales are still physical," Mr Jashanmal said.

Cyberspace avoided the problem of high rents, but building a site, maintenance and marketing were equally expensive. The view that e-commerce was less costly was a myth, he said.

The Jashanmal group has 14 branches and will open a new concept bookstore in Dubai this month.

Mr Jashanmal said he believed small bookstores in high-traffic areas offered a way forward.

"If one can maintain one's relevant market share, there is no reason it's not a sustainable business," he said.