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China's top independent bookstore chain hopes to turn the page on bankruptcy

English.news.cn   2011-11-09 18:54:39 FeedbackPrintRSS

by Xinhua Writers Ji Shaoting, Wang Wen and Liang Saiyu

BEIJING/XIAMEN, Nov. 9 (Xinhua) -- China's top independent bookstore chain is likely to reopen next year, but its closure in October prompted an outpouring of concern from readers and bookstore owners over the future of bookstores.

The Xiamen Cultural and Creative Industry Association set up a restructuring coordination group to seek investors and partners to revive the closed bookstore, a manager with the bookstore's legislation affairs department surnamed Chen said Tuesday.

The O2Sun Bookstore was founded in 1995 in China's coastal city of Xiamen, and had opened 30 branches across China to date. With a unique reading atmosphere and carefully selected books on shelves, the bookstore was considered China's top independent bookstore chain.

Since the chain declared bankruptcy ten days ago, hundreds of thousands of people have mourned the event online. At least ten newspapers and magazines have covered the closure and described it as a sign of the fall of bookstores.

"Several companies hope to participate in the restructuring plan and negotiations are underway. The result may be known in a week," Chen told Xinhua on the phone, adding that the bookstore's future depends on how much support it can rally.

"The coordination group has received support and encouragement from the city government, friends and customers. We will try our best to bail ourselves out, but we need time and help," she added.

Sun Chi, the founder of the bookstore, refused to answer phone calls from Xinhua. Chen explained that Sun has been bombarded by the media since the chain closed its doors on Oct. 31, and has refused to be interviewed.

Chen said Sun is currently in Hong Kong looking for investors. "She is grateful to everyone who cares about O2Sun, but is struggling under pressure."

"We hope the government will help us comfort book suppliers and provide us with short-term loans and preferential tax policies," she said.

She said she does not think this is the end of O2Sun, but a chance for revival.

MEMORIES OF O2SUN BOOKSTORE

"Seeing the bookstore close is like watching the death of my youth," said Xu Yuan, a 30-year-old Beijing-based journalist.

"When I saw someone posting pictures of closed O2Sun bookstores on his microblog at Sina Weibo, I thought it was a joke," said Xu, a regular customer of the O2Sun Bookstore since his days as a junior high student -- when the bookstore was named Sunshine Bookstore.

"It was a quiet, warm and romantic place, different from any other bookstore I've ever seen," he said.

"I fell in love with the atmosphere quickly, and spent almost every afternoon there after school. I fell in love with reading there," he said.

The chain began expanding just a few years after opening, aiming to provide a customer-friendly atmosphere.

"I witnessed the growth of the store and it witnessed mine at the same time," said Xu, a graduate of Xiamen University, which also had a famous O2Sun bookstore nearby.

Upon hearing of the closure, many Xiamen University graduates spread the news among their classmates, asking one another, "Do you still remember the place you used to wait for your Mr. or Ms. Right?"

"It holds too many of our memories. For me it was not only a bookstore," Xu said.

CAUSES OF BANKRUPTCY

Meanwhile, the bookstore grew faster than Xu Yuan, and the rapid growth could be partly to blame for the chain's bankruptcy.

"I believe O2Sun expanded to achieve scale effect, allowing it to cut costs and enhance marketing. But one should be careful about opening a new store, for even the slightest mistake is fatal for independent bookstores in today's market," said Jin Weizhu, board chairman of Sisphy Bookstore, a 14-store chain based in western Chinese cities.

"People assume that a cash crunch and poor management led to O2Sun's bankruptcy, but no one knows the true cause for sure," said Jin.

Despite aggressive market expansion, insiders believe booming e-commerce, poor market regulation, and huge costs have caused a decline in the physical book market.

Jin said a lack of regulations over the entire book industry means many e-businesses can start fierce competition.

"They even give customers books as gifts, as a marketing strategy to sell other things, like electrical equipment," he said.

"All independent bookstores will die in the next two to five years if the environment does not change," said He Ping, owner of Shanghai's famous independent Jifeng Bookstore.

"The bookstore's greatest burden is rent. It won't be long before my bookstore closes for lack of funds," said He, whose bookstore almost closed two years ago because of "unaffordable" rent, but was saved by the Shanghai municipal government.

Liu Suli, owner of Allsages Books, a so-called "sacred" place for readers near Beijing's renowned Peking University, said high rent makes it hard for bookstores to survive downtown, while too few customers makes it hard for them to survive in suburban areas. "It is too hard to run a bookstore well."

"I witnessed the closure of Borders in San Francisco this year. It was horrible," Liu said.

Borders, America's second largest bookstore chain, declared bankruptcy in February, and Barnes & Noble, the country's largest chain of bookstores, began selling off stores in August. The U.S. media attributed the decline of the physical book market to booming e-commerce.

THE FUTURE OF INDEPENDENT BOOKSTORES

Nevertheless, Liu Suli is not pessimistic about readers.

"The number of readers is not decreasing in China. It's quite the opposite. It is rising fast," he said.

"I prefer to go to physical stores like O2Sun or Jifeng. They act as editors by selecting valuable books for me, and this is where unique, independent bookstores' greatest value lies," said a culture industry investor who declined to be named.

However, those who enjoy the recommendations of independent stores turn to online bookstores where they can get books at a lower price, he added.

Bookstores have been striving to attract customers in many ways, including holding salons with celebrities, said Jin Weizhu of Sisphy Bookstore.

"It is helpful for branding and brought in a considerable customer flow," Jin said, adding that he is optimistic about the future of Sisphy.

"The key to a bookstore's survival is the balancing of culture and business. You will fail if you want to be purely cultural, and you will also fail if you sell books as you would pork," he said.

Beijing's One Way Street Library is an example of a bookstore that has managed to make ends meet while staying true to its ideals.

Initially launched by 13 cultural celebrities on a green lawn of the Summer Palace in 2006, the bookstore has since moved to a crowded shopping mall and closed all its branches in order to make ends meet.

"We communicate what we want to say, sell what we want to sell and invite who we adore," said Zhang Fan, one of the store's 13 shareholders.

"I feel sorry for moving as the shopping mall is a little bit 'plastic,' and the small yard in the Summer Palace was so pure and ideal. But for running a bookstore? We cannot be too ideal," Zhang said.

"One Way Street does not want to have scale effect. It is just a small business, like a small meat pie shop in Europe that can last for more than a century by only selling yummy pies," he said.

(Xinhua reporters Meng Zhaoli in Xiamen and Guo Yujing in Beijing also contributed to the story.)

Editor: Zhang Xiang
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