The Plot Thickens -- Independents Are Bailing Out Of Books. So Why Is Bob Sher Jumping In?

Is Ron Sher nuts?

Since he went into the bookselling business a year ago, more than one person has told him he must be crazy to take on the likes of Barnes & Noble and Amazon.com.

Independent booksellers are being driven out of business, not starting new stores, skeptics are quick to point out.

But Sher, a Bellevue developer and property manager known for turning distressed properties into successes, has his own way of doing things.

A year after he went into book selling, he's about to bring a new business model to Seattle's most prestigious bookstore, Elliott Bay Book Co. Sher is scheduled to close his purchase of the store tomorrow through his Third Place Books company.

Elliott Bay is being sold by its founder, Walter Carr, who said he was burned out after five years of declining sales. Carr asked Sher in November if he was interested in buying the nationally respected 26-year-old store that has been called the soul of Pioneer Square.

In those tough five years, 10 Borders and Barnes & Noble stores have opened in King County, providing bruising competition not only for Elliott Bay but other independent dealers, big and small.

Kay's Bookmark, which was adjacent to Barnes & Noble in University Village, went out of business.

Ninety-nine-year-old University Book Store is about to shrink its Bellevue outlet because of declining sales.

Even Powell's Books, the Portland giant touted nationally as an example of an independent store successfully fighting off the big chains, is in a tough battle. Founder Mike Powell likens the competition to "a head-on collision."

The numbers tell why: Amazon.com hit $600 million in sales last year, while Barnes & Noble and Borders together sold $5.5 billion worth of books. Costco and Wal-Mart also sell huge numbers.

Elliott Bay last year joined 25 other independent bookstores and the American Booksellers Association in an antitrust lawsuit alleging that Barnes & Noble and Borders forced publishers to give them secret and illegal deals. Borders denied the allegations, and Barnes & Noble said it follows accepted industry practices.

So when Ron Sher, a man with little experience in the book business, jumped into the market in a big way, retail consultant J'Amy Owens called it "a bold move." University Book Store general manager Bob Cross says, "He's got a lot of courage to open now."

Perhaps those are polite ways of suggesting he's just plain nuts.

What makes Sher think he can survive, much less flourish?

"I'm not the expert on books. I think everybody here knows more about books than I do," Sher admits during a visit to Elliott Bay.

Sher plans to keep all the current staff, including Rick Simonson, the 22-year Elliott Bay veteran who is head book buyer and manager of the popular author-lecture series. The readings will continue, as will the downstairs cafe.

He vows not to change the character of the store, but says some changes are needed to make the store competitive.

Sher plans to add comfortable chairs, as other large bookstores have done. "I've got a bunch of old chairs I've bought that I'll probably bring over the day I take over. . . .," he says.

Noting that many books are turned face outward on the understocked shelves, he remarks that there is room to intersperse as many as 250,000 used books among the 150,000 or so new titles.

"Elliott Bay is doing things right," he adds. "It's so good. But in retail you always have to be trying to make things better because everybody else is."

His gangly frame sticking out of a shapeless green shirt and a well-worn sport coat, the 56-year-old Sher looks at home among the brick walls, squeaky floors and rough-cut shelving posts at Elliott Bay.

At least, more at home than in the spanking-new Third Place Books store he opened in November in Lake Forest Park Towne Centre. But as a prototype for the chain he is building, Third Place better reflects his business model.

Sher, a California native who bought Bellevue's rundown Crossroads Shopping Center in 1985, had been thinking about the book business for years.

Among the co-founders of Third Place Books is Julian Riepe, who was Northwest regional manager of Half Price Books when Sher was trying to recruit the store to Crossroads.

Sher had begun to turn the Crossroads shopping center around by remodeling and bringing in new tenants such as QFC and Pacific Linen. He also turned it into a community gathering place revolving around a giant chess board on the mall floor, fish market, food court, magazine dealer and stage for live music and poetry readings.

Crossroads became the center of community life for much of East Bellevue and earned the nickname "mall with a soul."

Meanwhile, Sher saw that the mall's two bookstores, Barnes & Noble and Half Price Books, were a tremendous draw.

That led to Third Place, which was founded with Sher as majority owner, Riepe as president and Lamonts executive Peter Aaron as executive vice president. With plans to sell a mix of new and used books, they even hired an "antiquarian," used-book expert Rick Collins.

Sher has dedicated more than half of the 50,000-square-foot Third Place store to a dining, meeting and performance area with 550 seats, five restaurants (two of which Sher owns), a stage, a demonstration kitchen and his trademark giant chess board.

Seventy plush chairs are scattered among the stacks.

The stage is booked almost every day and night with authors, musicians and poetry readers. On a recent weekday, dozens of people crowded around the kitchen for a cooking demonstration. "At 12 o'clock on a Wednesday at any other bookstore, are you going to have this kind of community involvement and excitement?" Sher asks.

That's what the business is really about, he says. It's not so much about selling books as "creating community gathering places, changing neighborhoods, making neighborhoods work."

Third Place hasn't become profitable, but sales are meeting expectations, Sher says. He can be patient. It took 10 years before his Terranomics Development turned a profit at Crossroads.

He and the minority owners of Third Place invested more than $1 million in the first store. The price paid for Elliott Bay Books was not disclosed, but Sher says a published report that he paid $500,000 was incorrect.

Elliott Bay's separate identity will be maintained, but it will be operated much like Third Place, where used books differentiate the store from its large-chain competitors.

Portland's Powell, a used-book dealer who later added new books, believes Elliott Bay's addition of used books will improve its performance. "I can tell you that that's a more competitive model if done well," he says. "It's not the whole answer. We've had that model down here and we have our challenges despite that."

Elliott Bay book buyer Simonson said he has been receiving calls from authors and publishers around the country about Sher's rescue of the store. "It's not a story that's been written in a lot of cities," he says. "There have been stories of stores closing. I think people are seeing this as a significant, hopeful thing."

David Brewster, founder of The Seattle Weekly and Sasquatch Books, says Elliott Bay is one of the most influential bookstores in the nation in promoting quality books that have limited advertising budgets. "I just can't stress how important Elliott Bay is in the publishing culture of this country," he says. "It would have been an incredible loss for it to go. It was really close."

Of Sher, whom Brewster hasn't met, he says, "It's odd to think that there are people on white horses any more. But this looks pretty white to me."

"He seems to have a lot of money to put into the store," says Kathi Lucia, owner of Parkplace Book Co. in Kirkland. "I don't know of any other independent bookstore that has a human-resources department or a chief financial officer. He's starting off in a big way."

That bigness, coupled with Sher's plans to expand Third Place, leaves Lucia uneasy. Kirkland and West Seattle are being studied as possible locations for the next Third Place store, which Sher hopes to open late this year.

"I think that if they start to place stores that seem to be targeting independents, their image would be very different," Lucia says.

Keith Ervin's phone number: 206-515-5632. His e-mail address: kervin@seattletimes.com