Building a book business
Almost everyone who visits Powell's Bookstore's flagship location on Southwest Burnside ends up with a story to tell about the experience. For Rich Berman, the story dates back five years.
At the time, Berman had been fruitlessly searching for another copy of a favorite, but obscure, book he had loaned to someone and never gotten back. On a recent visit to Portland from his home in San Francisco, he stopped by Powell's Burnside store and mentioned the book to an employee. The employee directed Berman to a building across the street, which at the time housed the company's technical bookstore.
"I finally found (a copy) there — a hard-bound, clean edition," Berman told the Business Tribune.
In nearly 35 years with Powell's, CEO Miriam Sontz has heard countless stories like Berman's. Couples have met, fallen in love and even gotten married among the floor-to-ceiling bookshelves, she says. Children listening to parents read the words of Dr. Seuss in a corner of the store's Rose Room have taken first steps on the path to lifetime reading habits.
As Sontz moves toward her retirement from the company at the beginning of 2019, those stories offer confirmation that a career she says she never planned in any formal way has, in the end, made perfect book — and business — sense.
Since joining Powell's in 1984, Sontz has had a front-row seat as an industry has changed in unprecedented ways. She's also played a key role in developing a company that has helped set the bar for how independent booksellers can meet — and even overcome — the challenges that have cropped up.
The media stories about the demise of independent bookstores get it all wrong, Sontz says. "The book market has shifted dramatically over the years, but people are still reading."
Beginning with books
As a child growing up in Chicago, Sontz was a self-professed bookaholic. But it wasn't until after she graduated from Reed College in Portland in 1973 that she considered she might be able to turn that passion into a way to earn a living.
At the time, Sontz believed her career options were limited. Most women she knew who were working were either teachers or nurses. She had no interest in the former and the sight of blood made her woozy, so she spent five years bouncing around trying out different jobs.
At the same time, she was volunteering at A Woman's Place, a bookstore run by a feminist collective. Sontz enjoyed the work and wondered if she could find a way to make a living selling books. An entrepreneur even then, she managed to obtain a federal grant that covered her salary to work at the bookstore for a year.
She took that experience and parleyed it into positions with B. Dalton Books, a chain that started popping up in shopping malls in the 1970s and '80s, and J.K. Gill Co., a local book and office supply retailer. She had worked her way up from cashier to junior book buyer at the latter company when it was acquired by a larger company based in California. Sontz found herself unemployed. Her son was five months old at the time and she thought about staying at home for a while, but soon found she missed the book business. She interviewed with three local companies, and ended up accepting an offer to join Powell's as a book buyer. A few months later, when the company decided to open a store in Beaverton, Sontz was tapped to manage the new location and its 15 employees.
Two years later, she was asked to take over management of the Burnside store and the 50 employees there (that number has since grown to 200 staffers). She also served as the company's chief operating officer before stepping into her current role as CEO in 2013.
With Sontz as a key member of the company's management team working with founder Walter Powell and his son Michael, who has since retired, Powell's has grown from a used bookstore that opened its doors in 1971 with an initial count of 10,000 books to a retail outlet that boasts a combined inventory of 1 million new, used and rare books. CNN has identified the Burnside City of Books as one of the top indie bookstores in the world. The company also claims a rare status, with a third-generation owner in current president Emily Powell.
Those decades of growth and expansion haven't come without challenges, though. In the 1990s, the company's management and employees went through a turbulent time as workers sought to unionize. The effort succeeded in 1999, but led to nearly a year of tense contract negotiations before the two sides were able to come to an agreement and begin rebuilding their relationship.
In the meantime, the entire landscape of book selling shifted as e-commerce began to gain ground and a company called Amazon turned the traditional model for selling books upside down.
Since its earliest days, Powell's has always been a leader among its peers, striking out in directions that raised eyebrows among the business and bookselling communities. When it came to surviving in the face of competitors looking to claim a share of Powell's customer base, the Portland company decided to focus on what it did best.
The customer connection
Rich Berman, who managed to track down an obscure favorite book at Powell's five years ago, says he and his wife, Dana, schedule a trip to the bookstore every time they come to Portland. On a recent visit to the bookstore, the couple's purchases filled two bags.
The Bermans know they could order their books from Powell's website. The company lays claim to being the first independent bookstore to begin doing business online, a sector that now represents about 25 percent of the company's book sales. But the Bermans say it isn't the same as visiting the store in person.
"Online is fine, but it just doesn't have the same experience," Dana Berman says.
It's that mindset that Sontz and the Powell family have tapped in order to keep the company afloat.
"(Online retailing) has taken a big chunk of the market away ... that's a reality," Sontz says.
While independents have felt the loss, it was big-box bookstores like Borders, which closed its locations a few years ago, that took the brunt of the blow, leaving customers that still wanted a one-on-one experience unserved. That opened the door for independents to step in to fill the gap.
"One of the key pieces of the puzzle here for (independents) has been (to look at) what we offer that you cannot get online," Sontz said.
Powell's has always had a hold on providing a unique experience. Unlike most bookstores with noise levels that resemble a library, Powell's stores are a swirl of sound and activity, with the smells of cinnamon and fresh-brewed coffee from an in-house café mingling with the scent of book paper.
But Powell's has also found ways to expand that experience to a new group of potential customers. While older store patrons come to Powell's stores just for the books, younger patrons — those ages 15 to 30 — expect a wider range of products, Sontz says. In just about every room, books are intermingled with unique items such as socks featuring dinosaurs and rockets, bigfoot metal lunchboxes and action figures, and journals. A recent expansion of the Gold Room at the Burnside flagship store made room for Magic the Gathering cards alongside Manga and graphic novels. Powell's even has its own line of products, from seasonal tee shirts to water bottles.
"Our store is all about figuring out the next generation of readers and making sure they feel comfortable here," Sontz said. "Ten years from now, when they're buying books for their kids and they're thinking about where to go to shop, we think they're going to come back here."
A retail path less traveled
Walking on uncharted ground is part of Powell's genetic makeup. Sontz still remembers the day in 2000 that the company unveiled an expansion at its flagship store, which featured a showy entryway with double doors on the corner of Northwest 11th Avenue and Couch Street.
In the time between when the company had started the expansion and the day the doors officially opened, the nearby Blitz-Weinhard Brewery had decided to shut down its operations.
"We opened our doors ... to a deserted five-block area, which was then a gateway to a light industrial district that was dying," Sontz recalls. "People thought we were absolutely crazy."
What no one knew at the time was that a few years later, the development of the abandoned brewery property would jumpstart a transformation of the area, placing Powell's Burnside store at the gateway to what would become one of Portland's toniest neighborhoods.
That serendipitous mix of the right place at the right time with the right people has been key to the success of Powell's, Sontz says. She doesn't believe the combination could have been replicated anywhere else — even in Portland in the current day.
"Michael and Walter were these incredible entrepreneurial spirits. They were able to buy this big (Burnside) building at a time when (real estate) was not very expensive. They couldn't do that if it were right now. When we look at opening stores in neighborhoods now, the rents are outrageous."
At the time, the Powells and Sontz were taking chances that no other independent bookstores in Portland were even considering. While Sontz admits there was some risk involved — as there always is when stepping into untested business waters — the moves were never made without having a solid plan in place that took the full scope of the situation into account.
When the company decided to open a store in a shopping mall in Beaverton, for example, naysayers predicted the location would never attract book-reading customers.
"There were so many unknowns about Beaverton, it was considered a long shot at the time," Sontz says.
Michael Powell, however, had done his homework about the area. He held firm in his belief that Beaverton was the right location. The store, now in a space in the Cedars Hills Crossing shopping center, has grown to include the largest children's book section to be found in any bookstore on the West Coast.
But knowing when to not take a step has also been important to the success of Powell's, Sontz says. At one time, she and Michael Powell briefly considered opening a location for Salem before deciding against the move.
"Logistically, we could have made it work, but we're not Salem people," Sontz says. "We didn't have the passion for Salem that we (had) for Portland."
It's the same reason the company hasn't tried to replicate the Powell's experience in other parts of the country. Even if rents in a place like New York City allowed such a venture to pencil out, the location would be missing a key element that Sontz has always believed has been key to the success of Powell's stores.
"It isn't just about being independent; it's also about being local," she says. "How could Powell's opening in New York City ever be considered local?"
While the passion for Portland and books laid a foundation for success for Powell's, Sontz is quick to point out that there's more to the equation. It's an ingredient that too often is missing in independent bookstores.
"Passion, if it's not combined with sound business sense, it's a waste of time," she says. 'You need a sound business model. ... A lot of people in the book business actually got in to escape business. That's going to limit what you can do."
That business sense is what Sontz has been focusing on sharing with others before she turns the leadership reins of the company over to Emily Powell, the company president and owner, and current COO John Kingsbury.
"What I've been working on for the past few years is an understanding of the process and decision making that says you find out all you can about the past and then you (add) what you know about the present — and (then you take) a gamble on the future."