Books Inc., the oldest independent bookstore chain in San Francisco’s Bay Area, has filed for Chapter 11 bankruptcy protection in an effort to save its remaining businesses.
The company, established in 1851, also announced plans to close its Berkeley store on February 9. Despite this closure, Books Inc. intends to keep its remaining 10 locations operational during the reorganization process.
Newsweek has reached out to Books Inc. for comment.
Why It Matters
The bankruptcy filing of Books Inc. underscores the ongoing challenges faced by independent bookstores, as well as the broader struggles affecting the retail landscape in California and nationwide.
Customers shop at Books Inc. in the Laurel Village shopping district, in San Francisco, California on Thursday, July 11, 2019.
Customers shop at Books Inc. in the Laurel Village shopping district, in San Francisco, California on Thursday, July 11, 2019.
Paul Chinn/San Francisco Chronicle via AP
The company cited “annual revenue losses resulting from steadily rising operating costs and dramatically changing consumer buying habits,” as the reasons for its decision, issues it said were exacerbated by the COVID-19 pandemic.
Other retail stores in the Bay Area have suffered similar fates, having been hit by the long-term decline of foot traffic and the more recent rise of remote work. Department chain Bloomingdale’s recently announced that it would be shuttering its flagship store in San Francisco, the latest in a string of high-profile exits from the once-bustling city.
What To Know
With the loss of its Berkeley outlet, Books Inc. now operates 10 locations across the East Bay, Peninsula, San Francisco and San Francisco International Airport. Some staff from the Berkeley location are expected to be reassigned to other stores within the chain.
The decision to close the Berkeley store follows unsuccessful lease negotiations aimed at reducing rent, a spokesperson for Books Inc. telling Berkeleyside that, due to recent declines in sales revenue, “the amount of reduction needed in order to operate profitably going forward would have been quite significant.”
According to court documents, the company’s gross revenue sank from $20.8 million in 2019 to $11.3 million in 2020. While the company made a recovery, “dramatic changes to consumer buying patterns” in the COVID aftermath prevented it from fully bouncing back to pre-pandemic levels, revenue reaching $17.1 million in 2024.
“Sales dropped precipitously during the pandemic due to shelter-in-place orders and a general decrease in in-person retail shopping,” said the filing. “Even as the pandemic subsided, the widespread adoption of remote and hybrid work models hindered the recovery of foot traffic at many of the Debtor’s physical locations.”
What People Are Saying
“Books Inc. is not going away,” Books Inc. CEO Andy Perham said on Tuesday. “Our board, investors, senior managers and key partners agree that reorganizing with the tools afforded us by Chapter 11 is the fastest path toward putting our company on a smaller, financially stronger platform from which we can continue our long legacy of serving California readers.”
“Restructuring Books Inc. for long-term viability will require we make some very difficult decisions that affect our people and business partners,” Perham added, “and we intend to do everything we can to minimize these impacts.”
“Books Inc. is a great supporter of authors, including me. Please keep buying books from them!” author and journalist Katya Kengel posted on X in response to the announcement.
Lu Chen, a San Francisco resident and Moody’s Analytics senior economist, previously told Newsweek: “The pandemic really changed the pace of the city and, to a certain extent, the lifeline of the city.”
What Happens Next?
Books Inc. aims to utilize the Chapter 11 reorganization to establish a “sustainably solid financial footing,” with Perham adding that it hopes it can exit the process “within the next several months.”
The company plans to negotiate lease adjustments with landlords to better match current levels of foot traffic and sales trends. While the Berkeley store closure is confirmed, the possibility of additional closures has not been ruled out.
“If favorable lease arrangements cannot be reached for underperforming stores, then the Debtor anticipates closing those locations to meet its profitability goals,” said Tuesday’s filing.
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