Lessons for new owner as it inks a fresh chapter for Crossword

Crossword Bookstores has turned the page to start a new chapter with books at the centre of it, its new owner has promised.

The bookstore chain, made ubiquitous by its outlets in shopping centres and premium retail spaces in big cities across India, has just changed hands after fashion retailer Shoppers Stop sold a controlling stake to Pune-based franchisee Agarwal Business House (ABH) for Rs 41.6 crore.

The iconic brand started out as a set of stores in Mumbai, with the first in the upmarket Kemps Corner on October 15, 1992. The bookstore chain was begun by serial entrepreneurs R Sriram and K Anita, who sold it to Shoppers Stop in 2000 with ICICI Ventures enjoying 49 per cent share. In 2005, Shoppers Stop completed the acquisition and five years later, Crossword Bookstores turned from a division into a wholly-owned subsidiary.

“Our main plan is to expand and grow the brand, which is the only pan-India bookstore chain. We want to expand and make the reader and customer experience much better at the store level as well as online. So, digital transformation is also a big plan,” says Aakash Gupta, director, Agarwal Business House.

Last year, Covid-19 hit book sales — albeit not publishing per se — with the lockdown months shutting out physical retail altogether. In its annual report for 2020-21, Shoppers Stop pointed out that Crossword had revenues of Rs 21.58 crore, down from Rs 81.46 crore the previous year.

Its store count in operation had also shrunk from 40 to 29 (now 26). While the pandemic nudged the bookstore chain further towards online sales, it decided to close down loss-making stores, Shoppers Stop had noted in its annual report.

The growth of physical stores, however, is not going to stop, says Gupta, with plans to foray into various tier-2 and tier-3 cities as well.

There are 71 Crossword stores at present, 26 of which were owned by Shoppers Stop. Agarwal Business House was owning and operating 40 stores, while five other stores were run by smaller franchisees that will remain.

Gupta also assures that there will be no rebranding, but renovation and changes in terms of design of the stores. The stores will also embrace an omni-channel approach and the concept of endless aisle to allow buyers to browse and order products that are not available in the physical store they are at.

“We will definitely bring our focus back on books and serious readers. We also want to get into the edutainment segment, so products like toys with an educational value will be sold along with premium stationery and gifts that will continue to complement the books,” Gupta says.

Having been in partnership with Shoppers Stop for 23 years and as the biggest franchisee of Crossword, Gupta views the acquisition as a natural progression.

Crossword has gone through several avatars over nearly three decades, points out Kapil Kapoor, director, Roli Books, adding that for a while it was in a mixed merchandise retail format where books were taking up less and less place.

“Secondly, as a franchise, Shoppers Stop always ensured the same branding and experience across stores, but the merchandising and selection of books was left directly to the franchisee to negotiate with publishers. So the book selections varied,” he says.

Crossword survived under Shoppers Stop even amid the failure of other big players to crack book retailing. But for publishers, Kapoor feels it was disappointing for a retail corporate giant to not have a long-term vision and ensure uniformity across stores. “The entire experience kept changing. From a purist’s point of view, you go to a bookstore to be able to browse bookshelves. So if you focus on a multi-format experience for the sake of convenience, you have pretty much lost to an online player.”

Even before Covid-19, book shops had been staring at an uncertain future disrupted by e-commerce.

Book shops had to reinvent themselves after online marketplaces such as Amazon snatched range and convenience away from them. For book chains, the answer lies in steps such as going hyperlocal (where each shop may cater specifically to a local community) and a phygital mix that combines physical and digital experiences, says Kapoor.

A farsighted approach, deep pockets and the participation of both publishing and reading communities are essential for bookstore chains to thrive. That’s a chapter Crossword’s new owner would do well to memorise.