Books focus of chain's $22m expansion

Chief executive Rob Smith says people still like books being recommended to them. Photo / Glenn Jeffrey

Retailer Paper Plus is unveiling a $22 million store expansion and refurbishment plan as it shifts to a greater focus on bookselling.

It will revamp all of its 104 stores nationwide over the next two years and open up to 25 new outlets.

Chief executive Rob Smith said following extensive market research the group had identified books and stationery as its biggest growth opportunities.

But that was not how customers were perceiving the retailer. "We were seen more as a cards and novelties operator."

As a result Paper Plus is rejigging its business model.

The books section will now be at the entrance to the stores, franchise holders are training to become "book champions", and media personality Kerre Woodham has been signed on for another two years as the chain's book ambassador.

Despite the multi-media age, book customers still wanted the next page-turner recommended to them, Smith said.

Aiding its business plan is research company Nielsen's BookScan service.

As of December every New Zealand book retailing chain is now signed up to the data collection service, resulting in up-to-the-minute figures on what's selling.

The top 100 titles accounted for 20 per cent of book sales in this country, Smith said, and that was where Paper Plus was targeting its efforts.

"The number of books the consumer wants is quite narrow. So it's understanding what those books are and that you're always in stock with those types of titles."

He and book manager Joan McKenzie - formerly group book manager for Whitcoulls - had just conducted a series of training seminars around the country to upskill franchisees. In addition the chain would offer a "bookfind" service to source any title it did not stock, and would launch online retailing early next year.

Woodham's association with the retailer had been successful - when she endorsed a book Paper Plus' market share in that title doubled, Smith said.

Peter Kalan, New Zealand managing director of Whitcoulls and Borders, agreed a recommendation was a key part of whether a customer bought a book, "particularly if they get recommended a title that is like one they have read before".

To that end the company was expanding its range of titles in Borders and grouping them in genres, as it did in Whitcoulls.

It was also reinvigorating its training programme for store managers along the same lines as Paper Plus was doing.

Paper Plus' mostly husband-and-wife franchisees, who will put up the funds for the refurbishments, gave the group's new strategy the green light at the annual conference in August and by Christmas 28 stores will have received a makeover.

The group upgraded its Sylvia Park store in 2007 as a testing ground, moving on to Masterton in December 2008. But by then the world financial crisis had hit, causing it to pause and reassess.

Further research reaffirmed its strategy, Smith said.

The books and stationery sector dipped 4.7 per cent in the year to March and was down around 3 per cent in the current year, Smith said. In this environment Paper Plus was faring well with annual sales remaining flat at $151 million.

However, a serious recovery was not expected until 2011.

"If that is the case, then our business, it's about positioning for when that happens."