In Communications it's
Service, Service, Service!
town Jerusalem, the market
just can't support more than one
large retailer.
"It's all about economics," says
the soft-spoken Mr. Rucham,
who bought his shop 15 years
ago. "I'm in this business be-
cause I love books, but in the
end it's all about money. If I buy
100 Grishams from the pub-
lisher and sell only 20, I end up
eating them."
Still, Rucham believes that
the Israeli consumer is thirsty
for other bookstores and super-
stores with deeper selections,
though in his assessment such
ventures won't be successful; the
cost to both the customers and
retailers would simply be too
high.
Rentals are high, and a su-
perstore can't be established on
less costly real estate, like
Jerusalem suburb Gilo or even
the more accessible Talpiot, if it
is meant to attract customers.
In addition, there are the im-
port costs on foreign titles, which
can raise the cost of a book by
an additional 30 percent. After
the 17 percent Value Added
Tax, U.S. sales tax, shipping ex-
penses, port taxes, insurance
costs and inland transport fees,
a $7 book can cost much more
by the time it ends up on Mr.
Steimatzky's shelves.
"A couple of places have tried
to open their own versions of
Steimatzky's but ultimately
failed," says Mr. Rucham.
Sure, says Mr. Rucham,
Barnes and Noble can come to
Israel, but only in place of
Steimatzky, rather than along-
side it; otherwise, the market
just isn't big enough for both of
them.
Indeed, despite the fact that
Israelis buy more books per
capita than do Americans or Eu-
ropeans, mammoth foreign su-
perstores are not considering
opening up shop here.
Both Borders Books of the
U.S. and Records and W.H.
Smith, the British books retail-
er, say expanding to the Middle
East is too expensive and com-
plicated and the size of the po-
tential market does not offset
these costs.
"We know that if we could put
a Borders on a helicopter and
drop it into Israel, it would do
very well; however, there are
enormous obstacles," says Bob
DiRomualdo, CEO of the Michi-
gan-based Borders Group,
which includes Borders Books
and Music Stores and the small-
er Walden Books chain.
"It's a trade-off between the
ego and the wallet. The ego
would love to open stores in
places like Bangkok and Lon-
don, but the wallet prefers Flint,
Michigan, and Eau Claire, Wis-
consin."
❑
(c) Jerusalem Post 1996
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