McNally Robinson is an indie bookstore that figured it out: Focus on books

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One of the first things you notice when you walk into McNally Robinson Booksellers on any given day is the buzz.

On the first Monday morning in March, after a weekend-long snowstorm caused sporadic power outages and school closings, the store in Winnipeg’s Grant Park Shopping Centre was teeming with customers. On an unusually warm Saturday night the month prior, it was just as busy. Two young women laughed next to the magazines. A couple in their late 60s walked out with a kraft-paper bag full of mystery books for a coming trip. A trio of teenagers eyed graphic novels as one of them snapped photos of the group’s outing on his phone.

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Navigating the aisles feels effortless. The aura is cozy and relaxed. But what makes the Prairies-based retailer so magical for shoppers is decades of hard-won business savvy. The careful consideration behind the layout, design and inventory of each of its three locations – alongside a commitment to keep books as the nucleus of its operations – has quietly allowed McNally Robinson to become Canada’s largest independent English-language bookstore company.

The stores break the cardinal rules of corporate branding and retail: None are the same. Each has decided what works best for it through the help of its customers’ habits.

Some hold events, have bistro-style restaurants and community classrooms; others do not. In the sprawling Saskatoon location, a five-minute drive from the University of Saskatchewan, academic books dominate the shelves. The comparatively dainty store at the Forks Market, Winnipeg’s go-to hangout spot and tourist attraction, is a little haven of gifts for readers, the majority of whom wander there on a whim. Everything beyond the paperbacks and hardcovers is a purposeful afterthought that complements the book-buying experience.

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McNally Robinson, which is not obligated to report financials as a private company, made $20.4-million in total sales in the 2023 fiscal year, according to figures shared with The Globe and Mail. It is a far cry from so many other indie bookstores around the world that have suffered at the hands of internet giants such as Amazon, or that have shut down altogether amid the national expansions of big-box chains such as Indigo Books & Music in this country and Barnes & Noble Booksellers south of the border. Even Indigo reported a widened annual loss of nearly $50-million in 2023.

After years of trying and failing to sell general merchandise, dismissing books for different retail verticals – mostly to offset the damage from Amazon’s dominance of e-commerce by attempting to boost brick-and-mortar sales through Hail Mary shifts – book retailers at large could stand to take a page from the McNally Robinson model.

And, recently, the big players have started to move in that direction. After spearheading a turnaround at British retailer Waterstones Booksellers, industry veteran James Daunt took over as chief executive of Barnes & Noble in 2019, transforming the chain through a back-to-basics, books-first approach that has already provided a boost in sales.

At Indigo, which turned private this month after years of losing money, founder and returning chief executive officer Heather Reisman noted in late 2023 that, “over the last while, somehow books felt like they were not the heart and soul” of the stores. Reisman is now trying to get the more than 150 stores under her ownership to make books the star of the show again. The McNally blueprint is a likely balm for her company, too.

“All we do know is that if you want to run a successful bookstore, the books have to be your greatest, biggest and only focus,” says Lori Baker, one of the two co-owners who took over the reins at McNally Robinson nearly a decade ago.

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This might surprise many Canadians, but the people who run McNally Robinson and figured out the formula for its recent success haven’t talked to the McNally family in years.

It’s not because of bad blood. It’s because they don’t have much reason to, Baker explains. “We’re finally doing our own thing.”

Holly McNally started a business with her husband, Paul McNally, that was successful – until, suddenly, it wasn’t. In 1980, the booklovers enlisted the help of merchandiser Ron Robinson, a recently laid-off employee from the Eaton’s department store whom the couple had read about in a news article. The first location, at Winnipeg’s Kenaston Village Mall, opened in 1981, and the three of them spent the next 35 years telling everybody who would hear it how McNally Robinson is the best bookstore in the world.

That location is now gone, as are many others that were once under McNally Robinson’s banner. Three remain: two in Winnipeg and one in Saskatoon.

The downfall commenced shortly after the company opened a location in the Shops at Don Mills mall in Toronto. Yes, it was 2008. Sure, there were signs of a historic recession, and they had just shut down a Calgary store after only five years because of a rise in real estate costs and labour expenses. But the Toronto venture was part of a tried-and-tested trend for the McNallys: Open a bookstore in a large mall, model it after the successful locations in Winnipeg and keep expanding the brand.

“The problem was: Toronto isn’t Winnipeg,” says Baker, who joined the company as a controller in 2007 and managed accounting. “They were expanding too fast. And they didn’t get that simply replicating our stores wasn’t going to work. This isn’t a franchise.”

By 2009, McNally Robinson was forced to declare bankruptcy. Baker remembers her and Chris Hall, who managed the company’s literature sections since the 1990s, getting an e-mail in the fall from the McNallys to meet them at their back office at the Grant Park headquarters. They asked whether the two wanted to stay with the company, as they planned to lay off a majority of the staff.

In 2012, just as things were finally feeling normal after a few difficult years of barely breaking even, the McNallys called Hall and Baker to the office again – this time to announce they were retiring. The couple wanted Hall and Baker to own and run the business, with their daughter Tori McNally.

On the day they were supposed to buy the company’s shares, Tori McNally pulled out. Baker and Hall went ahead with the purchase anyway.

The three-year transition process with the McNallys was an emotional time, Baker says. “I think, by the end, we were almost waiting for them to go. We wanted to turn the business back to its focus.”

The Globe could not reach the McNallys for comment. (In 2004, their other daughter, Sarah McNally, opened a McNally Robinson branch in New York, which she says split from the parent chain in 2008 and is now McNally Jackson Books.)

After the sale was finalized in 2015, Hall and Baker began to bring the stores back to a slower, steadier growth. They did not rely on opening new locations for better profit margins. Instead, they expanded their inventory with the best and latest titles, forging lasting relationships with publishers and promising authors.

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The pandemic proved that Hall and Baker’s strategy was the right call.

In the holiday season of 2020, demand was surprisingly overwhelming. McNally Robinson was getting hundreds of book orders a day and thousands over the weekends. “We weren’t fully staffed, but everybody wanted to let us know how much they appreciated our place in the community as they waited to pick out their books from our shelves again,” Hall says.

The company changed almost everything – updating its online system, setting up different pickup options for books, creating new roles for its well-followed social-media accounts and running delivery services for the restaurants.

“At first, it always just felt like we were taking care of somebody else’s place,” Hall says. “During COVID, we truly approached things our way.”

Baker adds: “The pandemic years also taught us how much people have returned to physical reading. Books will always be our focus for this reason.”

McNally Robinson is now in a much better position for the future. In the past four years, it has saved up a ton of money, including at least $100,000 from halting the physical printing and mailing of its newsletters alone. Between January, 2019, and January, 2024, its annual sales grew 11 per cent.

Still, Hall and Baker are being cautious about opening new locations. The addition at the Forks in 2018 was an easy choice, Hall says, because it’s one of the most popular spots in the city. But it remains the only bookstore they started from scratch. The thing they really don’t want to lose by expanding too fast is their connection to the community.

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Executive manager Angela Torgerson’s face lights up on a jaunt across the Grant Park bookstore, as she points to the specialty socks on display. She says she found the German-made products donning illustrations of classic paintings during one of her many overseas trips for the company.

Any non-book items go through a selection process that begins with one question: Would a booklover appreciate this? “If the answer is yes, we pick it up and put it on our shelves,” Torgerson says.

Once such an item sells out, McNally Robinson often does not restock. Not only is each store different, each visit to the same store is as well.

“There’s so many stores that do the same thing of everything,” Hall says. “They sell you so much stuff without any focus or selections. We have an edge with McNally that they don’t.”

The company would never expect its customers to buy more general merchandise than books, or even the same amount. “That ratio of wanting to see something like a candle or toy picked up for every book at the counter is just bizarre for us to even think about,” Torgerson says.

What all of these decisions reveal to customers is the heart of the business: that McNally is listening to its reader-centred community. The faces of Canadian authors in giant photos on the walls demonstrate a sense of local pride. The McNally rewards card is laminated in front of you, just like a small-town library card.

“And nothing is more locally geared or specific than our events,” says John Toews, a soft-spoken force who co-ordinates the kind of functions for the company that have made McNally Robinson a must-stop on national and international book tours.

He says events became a lifeline after the bankruptcy, not necessarily financially, but for the company’s long-term viability and spirit. “We realized that if we wanted to remain around, the community needed to embrace us as a part of its fabric.”

Prominent authors who would have never thought to visit Winnipeg or Saskatoon find the cities becoming their new favourites because of the audiences that show up to buy their books at signings. “McNally held the most exciting event we had for our book,” says Andrew Stobo Sniderman, New York-based author of the 2022 bestseller Valley of the Birdtail.

“It’s just so cool that they have their own in-house bestseller list, which features first-time writers next to the legends,” he adds. “They spend weeks promoting your book at the store before people even get to read it, creating that important anticipation. And when you’re there, it’s like magic.”

Toronto-based Miriam Toews, a bestselling author of nine books, including Women Talking, which last year was adapted by Sarah Polley into an Oscar-winning film, credits McNally Robinson for kicking off her literary career with a job at the Winnipeg store. She says it will always be dearest to her.

Rodrigo Beilfuss, artistic director of Winnipeg theatre company Shakespeare in the Ruins, says McNally Robinson’s achievements are owed in large part to its partnerships with the sizeable but often underrated arts scene in Manitoba. “Along with us, they partner with so many other community groups here in a way that is beyond the superficial stuff. They get us and we get them,” he says of the symbiosis.

“McNally is a local institution, and maybe that’s why it is harder for it to translate in cities like Toronto or Vancouver that don’t always have that sense of community going for them. Like a lot of other great things on the Prairies, people here might take this for granted until they know it really doesn’t exist elsewhere.”

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