In a rare piece of good news for independent booksellers, Federal Trade Commission lawyers are reportedly recommending that Barnes & Noble Inc. not be allowed to buy the Ingram Book Group, the country's largest book wholesaler.
The ever-diminishing band of independent booksellers had vigorously fought the proposed $600 million purchase by raising antitrust concerns, flooding the FTC with tens of thousands of consumer petitions, and scaling back their business with Ingram.
The lawyers' recommendation, disclosed last night by Bloomberg News, is not binding on the FTC commissioners. Furthermore, Barnes & Noble, the country's largest bookseller, could challenge the FTC in court if the commission opposes the deal.
Still, the acquisition deal, announced in early November, looks increasingly to be in trouble.
"This news isn't surprising, given everything I know," said Richard Howorth, president of the American Booksellers Association (ABA).
Keel Hunt, a spokesman for Ingram, said, "We are confident that once the facts are objectively considered, the commission will respond favorably."
Officials at Barnes & Noble could not be reached for comment. Bill Baer, director of the FTC's bureau of competition, declined to comment.
The once-placid world of bookselling is now changing almost as quickly as the high-tech universe. The arrival of the online bookseller Amazon.com, with its ability to deliver almost any book in print within a few days, has led almost all booksellers, both the chains and the independents, to emphasize the speed with which they can get a vast range of titles.
For the chains, that has meant more warehouses. Borders Group Inc. expanded two of its six distribution centers, and is opening a seventh this year. Amazon expanded its Seattle warehouse, added a bigger one in Delaware, and now has a third one in Nevada. Barnes & Noble had planned to build two more warehouses before deciding that it was more efficient to buy Ingram instead.
The more warehouses the chains have, the less they needed to get books from Ingram.
Amazon.com, for instance, depended on Ingram for 60 percent of its books in 1997, but only 40 percent in 1998. This made it imperative for Ingram to strike a deal with someone, Chairman John R. Ingram has said in interviews.
But the independents, who have seen their ranks sliced in half recently and regard Barnes & Noble in particular as their archenemy, are upset by the thought of the chain knowing what and how much they were selling.
The ABA's Howorth, who owns Square Books in Oxford, Miss., was one of those who stopped doing business with Ingram after the sale was announced.
"I haven't bought a thing from them, but if the deal doesn't go through, I'll go back," he said.
But Ingram might not be the same. "If we don't do this deal -- or something like it -- we will have to shrink our business," Ingram's chairman said last month.
Meanwhile, the only other distributor with a national reach, Baker & Taylor Inc., just an nounced plans to nearly double its warehouse space.
All this jousting has become more urgent because everyone -- online booksellers, the chains and the independents -- are fighting over a pie that isn't getting any bigger.
Bookstore sales were up a mere 3.4 percent in the first three months of this year, essentially only keeping pace with inflation, the Census Bureau reported.