Reading A Market This bookseller figured out how to survive in the land of the giants: Find a niche and hit it hard.

The war was raging on between retail superstore book chains andthe nation's small, independent booksellers. And though theywaged valiant battles to survive, most independents were droppinglike flies. In reality, it was hardly a battle at all. Theout-gunned independents were posing no contest for thesuperstores' massive power to offer large-volume savings andhuge selections of book titles to their customers. But buoyed by asense of mission, entrepreneur Sherry McGee was unfazed by theodds--and in 1996, she dove headfirst into the fray.

McGee, 41, is the founder of Apple Book Center, an upscale,multicultural bookstore that has charmed residents of Detroit.McGee and her loyal customers agree it's more than a bookstore.Apple Book Center is a widely heralded neighborhood hangout wheremultiple generations form a base of repeat customers--and whosesecond-year sales rang in at $1 million plus.

How did McGee, a former sales and marketing executive in thestaffing industry, find the gumption needed to jump into a fieldmost of today's entrepreneurs fear to tread? "I [simply]saw a void," she says, downplaying the guts it took for her toenter the land of such giants as Borders and Barnes & Noble.The void she saw was in the urban ethnic marketplace.

"It started on a very personal note when I attended aseminar for minority business execs. The speaker closed by sayingthat as a culture, African Americans have to start reading more. Istarted paying attention to reading statistics and the urbanmarketplace--and [learned that] lower scores on standardized testsare directly attributable to a lack of regular reading in thehome," says McGee. "It just got in my heart fromthere."

It doesn't just take a village, McGee realized; it takes avillage bookstore. "[Once] I could see something was missingin our community," she says, "I decided to put my skillsand my own money on the line to make it happen."

Read All About It

McGee began spending evenings at the library saturating herselfwith book-industry research. "When I did my research, I sawboth ends of the spectrum," she says. "I saw the totallyfocused bookstore that has just mysteries or just feminine titlesor just ethnic titles. And at the other end was the superstore, all70,000 square feet of it with 200,000-plus titles. What I waslooking at was that point in the middle."

McGee envisioned a "neighborhood" superstore thatwould target the multicultural market. Despite an apparent lack offamily reading time, the statistics pointed to a viable niche:African Americans were spending more than $300 million annually onbooks. She knew that by devoting her selection to multiculturaltitles, she could offer a wider array than the multiculturalsections of bigger bookstores could.

With the help of a local Small Business Development Center,McGee added some finishing touches to her business plan. Then thesearch for start-up financing was on. "[Several] bankersturned me down flat without even reading my business plan,"she says.

McGee had no luck until the vice president of small-businessloans at Comerica Bank in Detroit helped her find her way."She believed in what I was trying to do as much as Idid," says McGee. "[She pointed to] my background inbusiness, my personal credit history, my career track record and myMBA, and told the [loan] committee that if anybody could make thisstore happen, I had the best chance."

Another boost to her financing appeal was the prime locationMcGee found in a newer strip mall anchored by a thrivingsupermarket. Located in a "healthy income" area, the3,500-square-foot space was perfect. The best part? Therewasn't another bookstore for miles around.

"Other [businesses] wanted the same location," saysMcGee, a fact which quickly became a motivation to get herfinancing pushed through. The company that owned the space likedMcGee's community-bookstore concept so much that its CFO gaveher a written commitment that the company would hold the locationuntil her start-up financing came through, turning away larger,established businesses in the process. "I'm sure they losta great deal of rent doing that, but they thought it was a goodcause," says McGee.

With the location set, the financing came through shortlythereafter. McGee had secured backing from the SBA and leveragedthe equity in her home to get the $250,000 in start-up money sheneeded from Comerica. Now it was time to put her plan inmotion.

When Christmas 1996 rolled around, McGee proudly opened thedoors of Apple Book Center, boasting 10,000 multicultural titles.Thanks to a publicity drive, more than a dozen articles about AppleBook Center appeared in local publications during its first fewmonths of business. Radio and cable-TV spots, as well asdirect-mail ads, helped spread the word.

The new store on the block created quite a stir, but salesgrowth was slow. By September 1997, McGee faced serious cash-flowissues. Significant sales volume remained a fantasy. "From thefirst day we were open, I'd been eating up my workingcapital," remembers McGee. "With the level of sales [wehad in September], I knew I'd be out of cash in amonth."

Although she knew she could go back to Comerica for additionalfunds, McGee committed herself to not putting another borrowed dimeinto the store. "I was determined that enough money had beenput into Apple Book Center that it was going to have to make it onits own," she says. So she took the remaining cash in herchecking account--roughly $10,000--and launched a do-or-dieadvertising campaign, with heavy emphasis on a local radio stationwhose primary audience was Apple Book Center's largest targetmarket: women over 25. Says McGee, "I put [the whole sum] intoadvertising. I just rolled the dice on the whole square."

You've Got Sales

"The book industry spends an average of about 2 percent ofits gross sales on advertising," says McGee. "That month,we went to about 10 percent of gross sales. We gambled."

The payoff? Visible results within days. "It was a matchmade in heaven," McGee says of her fortuitous plunge into anarrower scope of radio advertising. "There was about a 50percent increase in sales within 30 days," she says.

As the store's repeat-customer base mushroomed, McGee wasdelighted to find that some customers were driving miles to come toApple Book Center, passing several superstores on the way.

With the plethora of activities the store offers, it should havecome as no surprise. Apple Book Center's exciting and positiveenvironment has stimulated a loyal following from all age levels.The store features high-profile book signings, celebritystorytellers, eight different book clubs for children (including amother-daughter club), business and investment seminars forboomers, and travel and financial planning meetings for seniors.Add to that a monthly newsletter that goes out to 7,000 of thestore's faithful customers.

McGee is committed to offering something for everyone."About 25 percent of our floor space is dedicated tochildren's books," she says, "but if you want thelatest Stephen King, Barbara Kingsolver or Mary Higgins Clark, youcan get those [here], too, as well as [find] one of the broadestselections of multicultural titles in the area."

Booked Solid

Looking back, McGee marvels at how far she's come in justtwo and a half years. "I got into this business not knowing alot about it other than what I'd researched at thelibrary," she says. "I had to roll up my sleeves andlearn the distribution system and the margins, the whole nineyards. [Just a few months] before the store opened, I couldn'teven have told you where the books came from."

Today, Apple Book Center boasts more than 25,000 titles and hasa staff of more than a dozen full- and part-time employees,and--expecting a boost from online book sales at its recently addedWeb site--McGee is forecasting a 20 percent growth in sales thisyear. Her latest inspiration should also boost the bottom line: The"Apple Kids," nine different multicultural,three-dimensional characters with specific academic areas ofinterest, will be spun off into books to be released in the fall of1999.

Propelling McGee and the Apple Book Center phenomenon is hercontinuing sense of mission for her younger customers. "Ifyou're well-grounded in reading, then you're going to dobetter in other academics," says McGee. "Better readingskills translate into better [college educations], and thattranslates into better jobs," she says.

As for those dreaded superstores, at least in the case of AppleBook Center, it turns out they're only paper tigers. AndMcGee's fearless roar may be coming to a neighborhood near you:"We're hoping that once our cookie cutter is final, we canpick up the [multicultural-bookstore] concept and lay it down inanother community, regardless of its ethnicity, and have it workthere, too," McGee says. "In the long term, the AppleBook Center concept is a community giveback. Somebody had to do it,and I got chosen as the one."

Contact Source

Apple Book Center, 7900 W. Outer Dr., Detroit, MI 48235,http://www.applebookcenter.com