Facing declining business, Books Inc., a longtime bookstore in San Francisco's Castro district, announced this week that it will close its 2275 Market Street location. The last day is expected to be in mid-June.
"Sales have really been trailing off," said Michael Tucker, Books Inc.'s president and CEO, in an interview Tuesday, March 15, the day the closure was announced. The shop was at the end of a five-year lease.
"We've been losing money at that store for eight of the last 10 years," he said.
That, along with rising costs, helped lead to the decision to shut down the store rather than renew the lease, Tucker, a straight ally, said.
The location was the first he and his business partner opened when they took over the company in the mid-1990s, he said.
Tucker said the site has "some very dedicated customers," and he and others "really wanted" to keep the Castro site open.
"We've been committed to being there," he said. "... It's a very sad thing for me to be closing this one up."
Books Inc. has 10 other locations in the Bay Area, and another shop under construction in the South Bay city of Santa Clara is expected to open mid-summer.
The Castro store has been known for featuring books and readings by LGBT authors.
In a news release, Tucker said, "Any of the book clubs, events, and special programming" that "choose to will be moving to the Opera Plaza location," at 601 Van Ness Avenue. That site "will be expanding LGBT selections in books and magazines to continue to better serve customers from the Castro."
All nine staff members in the Castro "have been offered the chance to transfer to other locations," he said. "Anyone choosing not to transfer to another Books Inc. location will be offered a severance package. There are no layoffs scheduled for the company."
The store's new hours will be 11 a.m. to 8 p.m. through mid-June.
Rising costs
Tucker told the Bay Area Reporter he doesn't know why the Market Street site has been having trouble. He doesn't attribute the decline to the online retail site Amazon.
"It's not impacting other city stores that way," Tucker said.
While sales have dropped, costs were expected to increase.
Rent on the Castro shop "probably" would have gone up 12 percent, Tucker said. The business faced "mandated increases in payroll," rising health care costs, and other factors that "made it difficult to keep the store open."
"If sales could justify what we were doing, I would definitely keep it," he said.
He also worried that if the store were to stay open, the other locations could suffer, potentially leading to layoffs.
The total rent, including maintenance and other costs, is "a little over $200,000 a year," Tucker said. The landlord and property manager "couldn't have gone any lower than they have gone."
"They've been more than fair," he said.
Tucker has "no idea" what will happen with the site, which is "about 3,600 square feet."
Marshall Jainchill, CEO of Marshall and Company Property Management, which oversees the location, said Books Inc. "just felt they weren't doing enough sales. It wasn't a question of rent or anything like that. In fact, they pay relatively low rent compared to the market."
There had been no plans to raise the rent, Jainchill said.
"I don't think we had even established what the rent was going to be."
Asked what may go into the space next, Jainchill said, "Probably not a bookstore. I have no idea." He indicated it would be turned over to a leasing company to help find a new tenant.
"I certainly don't like to have any new tenants competing with our existing ones," he said, noting the location is already home to a fitness center, nutrition store, a sushi restaurant, and other businesses.
Jainchill doesn't have any idea how long the bookstore site may be empty.
"I hope not too long," he said.
Asia Yung Inc. and WS Gan Partnership, the property owners, are overseas and couldn't be reached, Jainchill said.
'Heartbroken'
Daniel Bergerac, president of the Castro Merchants business group and a gay neighborhood resident, said, "I'm just heartbroken, absolutely heartbroken" about the shop closing.
Many have been concerned about empty storefronts in the area, and Bergerac said, "I can't imagine what will go into a space that large."
Gay Supervisor Scott Wiener, whose District 8 includes the Castro, said, "I'm incredibly sad" about the closing of the shop, which he's lived close to "for almost 20 years."
"It's my neighborhood bookstore," Wiener said. "I've purchased more books at Books Inc. than I could ever remember. It's an amazing community institution, and I'm heartbroken that it's closing."
He said that when he first heard the news Tuesday, "my immediate assumption was there must be a terrible property owner forcing them out." However, he felt after speaking with Tucker that "this is not a bad landlord situation."
Wiener said since he'd just learned of the closing, he hadn't spoken with other businesses about going into the space, but he hopes to see a "good, neighborhood-serving retailer" there.
"We need good, active retail in Upper Market," he said.