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Village Green faces fiscal woes

The troubled Village Green Bookstore Inc. is not an ideal size or in an ideal location to compete effectively in today’s book-selling market, industry experts say.
If it were a larger chain, even if it were regional, the company could more easily have the purchasing leverage and marketing clout to compete with Barnes & Noble Booksellers Inc.

Village Green faces fiscal woes

The troubled Village Green Bookstore Inc. is not an ideal size or in an ideal location to compete effectively in today’s book-selling market, industry experts say.
If it were a larger chain, even if it were regional, the company could more easily have the purchasing leverage and marketing clout to compete with Barnes & Noble Booksellers Inc. and Borders Books and Music Inc., said Richard Howorth, vice president of the American Booksellers Association in Tarrytown.
“If a person had only one or two stores like me, I think I could respond to the competition a lot more rapidly,” said Howorth, who owns a large, independent store in Oxford, Miss.
The smaller competitor must expand stores to compete with the superstore features or specialize to fill a niche, but it must move fast, he said.
Village Green tried to do that. As it developed more stores, it added features to them.
In December, the firm opened two Kideology stores, which specialize in education-related toys and supplies and activities.
But small and midsize chains have much less flexibility and cash to make the changes quickly enough, Howorth said.
In addition, markets like Rochester’s are expanding more quickly than others, not allowing retailers much time to plan and change, he said. The process of corporate decision-making takes more time because companies cannot take bold risks as an independent owner could.
As the Rochester Business Journal reported in its Friday print edition, a quarterly report Village Green filed with the Securities and Exchange Commission this month states that company auditors have “substantial doubt” that the company can remain viable. More than $1 million in subordinated debentures came due April 28, and the company had only $12,338 cash and cash equivalents in hand.
The company is trying to secure financing, but was turned down June 10 for a $2 million line of credit, the report states. (Quarterly report on file with the SEC.)
It has closed four of its 10 stores since the beginning of the year to remain competitive, the report stated.
Other small chains across the country are having similar competitive strains and also have closed stores to stay afloat, according to the booksellers association.

RBJ Daily 6-24-96

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