Exclusive Books recently bought rival chain Facts & Fiction. Shaun de Waal asks Exclusive Books MD Fred Withers what the implications are
Exclusive Books and its owners, Mega,recently bought Facts &Fiction, your main rival in Gauteng, the province which accounts for the majority of South Africa’s booksales. Will you be closing any of the Facts &Fiction shops, either in the near or the more distant future?
Exclusive Books will not be closing any of the Facts & Fiction shops in the foreseeable future. In the middle future we will assess them on a branch-by- branch basis, as we do with Exclusive Books, and will decide whether to close or maintain each branch.
What changes will you make to Facts & Fiction?
We intend getting each branch to buy autonomously, according to the needs of its customer base. This is the philosophy of Exclusive Books:we believe it leads to a greater diversity of books in the shops. In the past, Facts & Fiction bought books centrally.
Both Exclusive Books and Facts &Fiction are situated in upmarket shopping centres, with rather luxuriant fittings and so on. You closed the original Exclusive Books shop in Hillbrow. Do you think this contributes to the perception that books are a luxury available only to the relatively wealthy?
We do not choose to position our bookshops specifically in “upmarket shopping centres”. We look for centres where there is after -hours trading, that is, shopping centres with cinemas as well as strong daytime trading with other strong retailers such as Woolworths.
We believe that that Facts & Fiction has a more middle-market niche. The fixturing costs for those shops are not as expensive as those for current Exclusive Books shops. This will give us an opportunity to put Facts & Fiction branches in more centres -possibly in centres which might not have been viable for Exclusive Books shops.
There are fears that Exclusive Books’s acquisition of Facts &Fiction makes it the only real retail outlet for books in Gauteng with, for instance, the power to demand large discounts from publishers, which in turn squeezes their profit margins and makes it harder, especially for smaller publishers, to publish locally. How do you respond?
We do not believe that Exclusive Books will be “the only real retail outlet for books in Gauteng”. We have many competitors – CNA, PNA, Estoril Books, Huxley’s, Knowledge Resources, Jutas, supermarkets, second-hand bookshops, Leserskring and other mail-order companies. Any of them could choose to stock more books or a range similar to ours.
Like any other retailer we negotiate with our suppliers on an ongoing basis to get the best possible terms. We have an excellent relationship with all the publishers who supply us, including smaller ones. We have a good reputation for consistent and knowledgeable ordering of books; a very low rate of returns to publishers; and a very good history of payment to publishers.
Surely this will only benefit publishers both large and small? Our acquisition of Facts & Fiction has been welcomed strongly by all publishers who have chosen to express an opinion to us. What in fact does “squeeze” profit margins is retailers not paying accounts, not ordering correctly, or returning large quantities. We are very aware of Facts & Fiction (in the past) and other retailers (in the past and now) indulging in this.
Mega also recently acquired British bookshop chain Hammicks. Does this mean you will be able to cut out the middlemen (Sotuh African distributors) and pay for books in pounds rather than severely depreciated rands?
While Exclusive Books has, in the past, respected “territorial rights”, we will endeavour to obtain books as inexpensively as we can. At the moment, South African distributors do provide important services in the way of warehousing of books and marketing and promotion. For as long as these distributors continue to “add value” we will continue to support them.
We do not wish, however, to have our customers prejudiced by not being able to obtain books as timeously as they can be obtained overseas or through the Internet, or by paying more than they should for books.