Tattered Cover Book Store

1628 Sixteenth Street
Denver, Colorado 80202
U.S.A.
Telephone: (303) 322-1965
Toll Free: (800) 833-9327
Fax: (303) 629-1704
Web site:http://www.tatteredcover.com

Private Company
Incorporated: 1980 Employees: 310 (2000) Sales: $40 million (1998 est.) NAIC: 451211 Book Stores

Among book lovers everywhere and within the book industry, the Tattered Cover Book Store is a legend. One of the largest independent bookstores in the country, the Tattered Cover carries a diverse selection of books from small literary presses and publishing houses as well as from the major publishing companies. Together the company’s two bookstores house over 150,000 book titles and more than a half million books purchased from 9,600 different publishers and distributors. The Tattered Cover also carries more than 1,200 newspapers, periodicals, and magazines, including foreign language magazines. Both of the Tattered Cover Book Stores offer patrons the setting of a home library, with sitting areas for browsing through books. Antique library desks, rich, green carpet, and dark, golden-brown shelves, placed to form nooks and alcoves, create the intimate ambiance of an Old World bookshop. The Tattered Cover Book Stores are centers of intellectual community for Denver, with more than 300 author appearances and book-related events each year. Customer service is a key component to the Tattered Cover’s success; the staff is knowledgeable about books and the company has an international reputation for finding little-known and hard-to-find books.

1970s: From Bookshop to Super Store

When Joyce Meskis purchased the three-year-old Tattered Cover Book Store in 1974, the 950-square-foot shop carried 12,000 books and employed one person. Located in the Cherry Creek district southeast of downtown Denver, the Tattered Cover was not Meskis’s first venture into bookselling. Employed in bookstores and libraries for many years, Meskis originally opened the Parker Book Shop, in a small town 20 miles southeast of Denver. The planned development community surrounding the bookstore failed to materialize and Meskis closed the store within one year. When the Tattered Cover went on the market, Meskis raised $30,000 to buy the bookstore with money borrowed from relatives and friends.

Meskis transformed the Tattered Cover into a European-style bookshop modeled on a student reading room at Purdue University, where Meskis had majored in English, and on world-renowned bookshops in London. Meskis hoped to foster the love of books by creating the setting of a home library, with comfortable antique chairs and couches placed throughout the store as an invitation to browse. She wanted to provide customers with a broad selection of books, beyond the narrow range of merchandise offered by the chain bookstores, such as B. Dalton and Waldenbooks, which had become the dominant booksellers in the 1970s. Meskis sought to bring people and books together by helping customers find any book, and special orders became a mainstay of the business.

During the first decade under Meskis’s ownership, the Tattered Cover expanded eight times. The first expansion of the store began with the dismantling of a bathroom and its walls to provide space for a few bookshelves. When neighbors vacated adjacent retail stores, Meskis leased those spaces until the store reached 6,000 square feet. In 1983 the Tattered Cover opened a second location only one block from the original store. The new locale accommodated over 11,000 square feet of retail space on two floors. With additional chairs, sofas, and reading lamps Meskis preserved the welcoming ambiance of the “Old Store.” The company maintained offices and sold bargain books—special reprints and publisher overstock—and supplemental product lines at the original location, while book receiving operations and the core retail operations moved to the new location. With the help of 75 customer volunteers, Tattered Cover’s staff of 54 moved 3,000 boxes containing 125,000 books in one weekend.

By 1986 the Tattered Cover outgrew its new space, and Meskis and the Tattered Cover staff began to explore their options for improving operations. They decided to consolidate the two stores into one large facility and to update its paper-based methods of record keeping. While the company had grown continuously over the years, the company’s paper process for managing operations remained the same. It had become impossible to use index cards to keep account of more than 200 special orders per day and a growing inventory of 200,000 books. To resolve the problem Meskis and the staff decided to implement a computer-based inventory system.

Concurrent with the technological switch to handle the growing inventory, Meskis found a new store only a few blocks from the original store, a 40,000-square-foot space where a department store was in the process of liquidating. The Tattered Cover’s new retail space covered three floors plus a 2,000-square-foot basement that the company used for back office functions. Again, the Tattered Cover’s loyal customers volunteered to move books; so many people wanted to help that the staff posted a sign-up sheet. Professional movers handled the heavy equipment and furniture, while 130 employees and 120 volunteers moved cartons of books. Despite the problems of moving as the Christmas shopping season commenced, relocating the store, as well as implementing the computer system, had been essential to better serve the company’s customers.

Status Grows in the Late 1980s

With more than double the company’s previous retail selling space, the Tattered Cover blossomed as one of the premier independent bookstores in the country. Though the new store housed 700 bookshelves, staff also stacked books along the edges of the wide, three-story staircase. The company featured new releases and seasonal titles on display cases on the landings between each floor and on antique tables throughout the store. The company scattered additional overstuffed armchairs and reading lamps amidst the alcoves of bookshelves to accommodate customer browsing. Unusual decorative touches included a church pew in the religion section and, in the psychology section, a couch like one that Sigmund Freud might have had in his office. Meskis had the computers painted brown to blend with the atmosphere of the store. The new store also provided a larger area for author readings and autograph sessions.

The Tattered Cover became a local center of the intellectual community as author appearances and book-oriented events occurred almost daily. A variety of seminars, such as brown bag lunch seminars by business writers, attracted a diverse customer base. The staff developed programs on First Amendment rights and on how to organize a book club reading and discussion group, as well as children’s activities and contests. The store published the Tattered Times newsletter, featuring articles on authors and new books and an events schedule. As part of a renaissance of independent bookstores in the 1980s, the Tattered Cover became a model for bookstores elsewhere.

While the Tattered Cover had become a landmark among Denver residents, nationwide the bookstore had become a legend. The store had gained the respect of major and minor publishers and attracted national celebrities and politicians. (Both the New York Times and the Christian Science Monitor featured the bookstore in articles during this time.) While the Tattered Cover became a favorite stop for authors, Denverites took special care to bring out-of-town visitors to the store. In 1989 U.S. Senator Tim Wirth introduced a proclamation into The Congressional Record, officially naming the Tattered Cover Book Store as a state treasure.

Despite the relatively small population of Denver, per capita book sales at Tattered Cover ranked 17th in the United States in 1989. Fiction comprised approximately 7 percent of sales and bargain books comprised about 6 percent of sales, unusually large volumes. The staff of 170 employees included 15 buyers of back-listed books and four buyers of new releases. An inventory of nearly 400,000 books covered over 100,000 titles while an additional 75,000 titles were available on the computer database. This access to a large selection of books resulted in 250 to 350 special orders each day. The Tattered Cover required three switchboards and 24 telephone lines to meet the demand for customer service.

Further Growth in the 1990s

Handling over 2,000 transactions on an average business day, the Tattered Cover continued to find new ways to organize operations. In early 1990 the company leased warehouse space near the store for book receiving operations and mail-order services until a permanent facility could be acquired. Meskis began to search for a building to purchase, preferring a historical building which she viewed as compatible with the company philosophy, and found a complex of four buildings in historic Lower Downtown (LoDo) Denver. She and John Hickenloope, owner of the Wynkoop Brewing Company, a LoDo restaurant and microbrewery, purchased the buildings for $2.3 million. Plans for the historic buildings, a total of 225,000 square feet of space, included a Tattered Cover bookstore, other retail stores, and 60 to 80 housing units, with two-thirds of the units to be designated for low to moderate income residents.

With the space to grow, the Tattered Cover reorganized its behind-the-scenes operations. In August 1990 the company moved shipping and receiving operations into a 30,000-square-foot warehouse space in one of the LoDo buildings, followed in September by administrative functions which relocated into a 25,000-square-foot office space. Of the company’s 230 employees, about 120 worked at the LoDo facility. Meskis also leased the fourth story of the Cherry Creek building. Certain back office functions were moved from the basement to the fourth floor, clearing the basement for more books.

Company Perspectives:

Books are more than a product —the ideas they contain are the past, present, and future of our society. The business of books is more than just a business. Our commitment, as always, is to bring you the best selection and service we possibly can.

Meskis opened a second Tattered Cover Book Store in one of the LoDo buildings in October 1994. The $250,000 project involved the restoration of the original oak staircase, hardwood floors, and brick. The LoDo store opened with 5,000 square feet of retail space on the first floor while renovation of the upper floors of the building continued. The store carried 30,000 titles and an inventory of more than 45,000 books and also included a coffee bar. Like the Cherry Creek store, the LoDo bookstore featured dark, wood shelves and sitting areas of antique furniture scattered throughout the store. Old, wood library desks served as customer service desks and the computers were given a low-tech facade with brown paint.

Changes at the Cherry Creek store included the opening of a coffee bar in November 1994 and the addition of a restaurant on the fourth floor after the Tattered Cover relocated the fourth floor office functions to the LoDo facility. The Fourth Story Restaurant opened in March 1995 serving Colorado and American cuisine at lunch and dinner; the restaurant also prepared Sunday brunch and afternoon tea.

The upper floors of the Tattered Cover LoDo store opened in October 1996. The additional floors added 30,000 square feet of retail space, including an events center with seating for 250 people. The coffee bar expanded with food items for the downtown lunch crowd; several dark wood magazine racks provided a border around the dining area and its antique tables and chairs. The store carried fewer titles than the Cherry Creek store, providing a more spacious atmosphere. Also, hardwood floors on the first floor and exposed brick throughout the store gave the LoDo bookstore a more urban atmosphere than its Cherry Creek counterpart.

Challenges to Independent Bookstores

While the Tattered Cover expanded, independent booksellers nationwide faced increased competition from chain bookstores and Internet-based commerce. Chain bookstores, such as Barnes & Noble, Borders, and Media Play, received volume discounts from major publishers, enabling them to offer new book releases for up to 50 percent off the regular cover price, both in the stores and on their web sites. Because Denver had an avid reading population above the national average, chain bookstores were attracted to the area. Media Play opened a store in downtown Denver in 1994, less than a mile from the Tattered Cover LoDo store, while Barnes & Noble opened five stores in the Denver metropolitan area between 1991 and 1995. Among those new stores was the fall 1994 opening of a 35,000-square-foot store, including a Starbucks coffee bar, about two miles from Tattered Cover’s Cherry Creek location. As a result, Tattered Cover experienced no sales growth during the 1994 Christmas shopping season compared to 1993.

Overall development and growth in population in the Denver area also affected Tattered Cover’s bottom line. The 1996 opening of an upscale shopping mall in southeast Denver drew customers away from the Cherry Creek Mall across the street from the Tattered Cover. In 1996 the Tattered Cover froze employee salaries for one year; after terminating the freeze, Meskis asked employees to contribute to their benefits package. In 1998 Barnes & Noble opened its eighth Denver area bookstore in a new downtown shopping center one mile from the Tattered Cover LoDo store.

The Tattered Cover also experienced competition from Amazon.com and other online booksellers who offered books at discount rates from 20 percent to 50 percent off the regular cover price. Even after customers paid for shipping and handling fees, Amazon.com offered new book releases at a lower cost, and more conveniently, than the Tattered Cover and other independent booksellers. In many cases, even a large bookseller like the Tattered Cover could not purchase the books wholesale for less than the retail price offered by Amazon.com and chain bookstores. Special orders also declined at the Tattered Cover with the advent of online commerce. Additionally, because online booksellers were not required to charge a sales tax, they possessed an added competitive edge.

The Tattered Cover took a number of measures to compete with chain bookstores and online booksellers. Though the idea of adding a coffee bar to the Cherry Creek store had been discussed previously, Meskis added the coffee bar and restaurant as a response to competition from the Barnes & Noble bookstore near the Cherry Creek store. With the Fourth Story Restaurant and extended hours at the Cherry Creek store (from a 9:00 p.m. to a 11:00 p.m. closing time) Meskis hoped to draw customers to the bookstore for browsing before or after a drink or a meal. Meskis also moved bargain books to more visible locations in the two bookstores. Sales increased after the Tattered Cover launched its online store by incorporating its database of book titles to the Tattered Cover web site in June 1997. The company had to stop investing in the web site by early 1998, however, as the store could not compete with Amazon.com’s superior technology. Funds spent on the web site diverted money from buying books, resulting in fewer books on the shelves, Meskis’s priority.

Key Dates:

1974:

Company is acquired by Joyce Meskis.

1975:

Company begins first of several expansions.

1983:

Tattered Cover relocates to larger retail space.

1986:

A second relocation more than doubles retail space.

1989:

Company is introduced into The Congressional Record as a Colorado state treasure.

1994:

New store opens in Lower Downtown Denver.

1995:

The company opens the Fourth Story Restaurant.

1997:

Tattered Cover launches online sales on website.

2000:

Meskis receives first Lifetime Achievement Award from the American Booksellers Association.

As competition from chain bookstores led to the closure of independent bookstores, independent booksellers banded together. In 1998 the Tattered Cover joined with 25 other plaintiffs in a lawsuit filed by the American Booksellers Association (ABA) against Barnes & Noble, Inc. and Borders Group, Inc. The antitrust suit claimed that these companies had an unfair advantage because they received preferential treatment in negotiating contracts with book vendors. Independent bookstores did not receive the same benefits which included discount rates on wholesale purchases, lenient book return policies, and cooperative advertising and other promotions. Certain special deals were not related to the volume of purchases. This information had come to light during the out-of-court settlement of a similar suit in 1994.

The ABA suit cited the Robinson-Patman Act of 1936. The federal law protected small businesses from discriminatory practices that favored large businesses. Between 1991 and 1996 the market share for book sales at independent booksellers declined 22 percent while the market share for chain stores increased 58 percent; by 1998 market share for independent bookstores declined 40 percent. The plaintiffs in the lawsuit claimed that discriminatory deals had facilitated the growth of chain bookstores by giving them an unfair, competitive advantage over independent bookstores. The suit was scheduled to be brought to trial in 2001.

Independent bookstores also sought to improve their competitive position through other means. In response to online bookselling, Meskis and other independent booksellers emphasized the tactile experience of taking a book off the store shelf and turning its pages, an experience special to book lovers everywhere. In a letter to her customers Meskis expressed her concerns with the idea of community responsibility, basing the quality of a community on the kinds of businesses one found in it and on money spent in the local community where it continued to circulate, rather than go to a company in another city.

A third concern of independent booksellers involved the large degree of control that chain booksellers have had in what books get published and distributed. More than 1,000 bookstores banded together as Book Sense 76, an association of independent bookstores dedicated to making a variety of books available in a democratic, free society, maintaining “Independent bookstores for independent minds.” The Tattered Cover set up displays of books by lesser-known authors and from small publishing houses which have been suggested by Book Sense members and their customers.

While Meskis had been recognized for her work by various organizations in the past, in June 2000 the ABA honored her with its first Lifetime Achievement Award at the annual Book Expo America in Chicago. As a founding member of the American Booksellers Foundation for Free Expression, Meskis fought bans on such books as Mark Twain’s The Adventures of Huckleberry Finn and the American Heritage Dictionary. She served in several positions of responsibility with the ABA, including president from 1990 to 1992. Meskis promoted the idea of the bookstore “superstore” and provided leadership and support for booksellers to enhance the atmosphere of bookstores.

Principal Competitors

Amazon.com, Inc.; Barnes & Noble, Inc.; Borders Group, Inc.; Media Play.

Further Reading

Accola, John, “Tattered Cover Takes Aim: Retailer Joins 25 Others in Antitrust Suit, Citing Chapter, Verse on Why Chains Stifle Competition,” Rocky Mountain News, March 19, 1998, p. B1.

Atchison, Sandra, “Chain-Store Massacre in Bookland?,” Business Week, February 27, 1995, p. 20.

“Book-Wise Denverite Lauded in Her Pursuit of Civil Liberties,” Denver Post, October 22, 1995, p. G2.

Booth, Michael, “Online Retailers Getting Free Ride,” Denver Post, March 23, 2000, p. B2.

Carlin, Margaret, “Bookstore’s Tale a Moving Story,” Rocky Mountain News, January 25, 1983, p. 37.

Colman, Price, “Tattered Cover Dipping into Software,” Rocky Mountain News, January 4, 1994.

Conner, Chance, “Barnes Opens Bookstore Brawl,” Denver Post, September 30, 1993, p. C1.

“Denverite Wins National PEN Award,” Denver Post, April 13, 1995, p. A2.

Fein, Esther B., “A Book Stop in Colorado,” New York Times, December 23, 1992, p. C15.

Finan, Christopher, “Joyce Meskis: Pushing Books and Free Speech,” Human Rights, October 1, 2000, pp. 10-13.

Gyure, Michelle, “Glitz, Glamour & Tattered Covers,” Colorado Business Magazine, April 1991, p. 10.

Jacobs, Andrea, “The Mother of Denver’s Famous Landmark,” Intermountain Jewish News, January 25, 1996, p. 4.

Katz, Alan, “Tattered Cover’s Meskis Stands Up for Hometown Values,” Denver Post Magazine, December 24, 1995, p. 8.

Knox, Don, “Indie Bookstores Win Battle in War with Chains,” Denver Post, June 3, 1999, p. C1.

Locke, David, “Buy the Book: At the Tattered Cover, Joyce Meskis Shows How Reading—and Selling—are Fundamental,” Sales & Marketing Management, May 1995, p. 26.

Mason, M. S., “In Rocky Mountain Book Heaven,” Christian Science Monitor, October 22, 1989, p. 12.

McDowell, Edwin, “Bookstore Thrives on Independence,” New York Times, July 17, 1989, p. D1.

McPhee, Mike, “Bookstore Wants Last Word with Cops,” Denver Post, April 12, 2000, p. B1.

Nelton, Sharon, “A Business That Sweats the Details,” Nation’s Business, March 1992, p. 38.

O’Brien, Maureen, “Huge Expansion Planned for Denver’s Tattered Cover,” Publishers Weekly, February 8, 1993, p. 9.

Parker, Penny, “Bookstore Battle Heats Up,” Denver Post, March 6, 1995, p. C1.

——, “Tattered Cover Expands Store, Celebrates in LoDo,” Denver

Post, October 9, 1996, p. C3.

Raabe, Steve, and Jeffrey Leib, “Tattered Cover Seeks Downtown Space for Mail-Order Operations,” Denver Post, March 16, 1990, p. C1.

Reed, Carson, “The Tattered Cover; Swamped by Success, a Denver Bookstore Computerized,” Colorado Business Magazine, February 1990, p. 24.

Schwab, Robert, “Local Booksellers Join Lawsuit: Barnes & Noble, Borders Accused of Negotiating Unfair Advantage,” Denver Post, March 19, 1998, p. C1.

Wood, Christopher, “Taking a Page from LoDo History: Tattered Cover Plan is ‘Tough’ One,” Denver Business Journal, October 18, 1991, p. 3.

—Mary Tradii