* Coral Gables bookseller Books & Books is branching out. By the end of this year, owner Mitchell Kaplan plans two new locations to complement his existing two bookstores. The flagship Coral Gables location and Lincoln Road outpost will be joined by a store in the Bal Harbour Shops and a store-within-a-store at the Delray Beach retail shop of "serious tools for serious readers" merchant Levenger.

"I sort of have to keep an eye on looking at those areas that might benefit from a store like ours, and the occupancy costs of being in an area that are not prohibitive," says the soft-spoken Kaplan, his tiny round glasses perched at the end of his nose.

He especially hopes that "Books & Books in Levenger," will snag customers who would never have made the trek to his Coral Gables or Lincoln Road locations. "We hope it will be a revenue source," he says.

Delray Beach-based Levenger, which sells everything from high-end pens to desks through a catalog, the Internet and a few retail locations, expects the Books & Books name will draw customers to its only South Florida store, says Mim Harrison, editor of Levenger Press, the company's publishing arm. "It will bring more visibility to the store," she says.

Harrison says the company liked the idea of giving customers access to selections from a book-picking expert--and she believes Kaplan's staff at Books & Books are experts. Indeed, Kaplan says choosing the right reading material for customers is what Books & Books does best. "What is it that we do mostly on a daily basis? We recommend books. We hand-sell books," he says. "We try to have a selection which makes people think. 'I wonder what Books & Books has?'"

To make sure that selection is interesting and reflects local tastes, Kaplan's staff of 30--divided almost evenly between full-time and part-time--has many professional booksellers who have studied the field and make skillful recommendations.

Kaplan has also demonstrated a knack for hosting special events and book signings, in the neighborhood of 40 to 50 each month. The store is known nationally as one of the top independent booksellers, and because of that is able to snag high-profile authors, says Cynthia Cohen, president of Miami-based retail strategy consultancy Strategic Mind-share. "One of the things that validates that is that [former president Bill] Clinton did his South Florida book signing there," she says.

Although books purchased during author signings, and other affairs, rarely cover his costs, Kaplan says such events bring publicity and traffic to the stores, and create a sense of identity for Books & Books. In a retail world where competing booksellers include massive national chains such as Barnes & Noble and Borders. Internet behemoths such as Amazon.com and mass merchandisers such as Wal-Mart and Costco stores, independent booksellers have to work harder to bring in customers.

"Successful independent bookstores have heavily gone into what we call the events business, and that is one way in which stores are able to remain competitive," says Avin Mark Domnitz, CEO of the American Booksellers Association, an industry group for independent booksellers, of which Kaplan is currently president.

"The market is saturated right now," Kaplan says. "The book business is not growing, in fact it's been stagnant. So you've got this stagnant pie, and more people taking a piece out of it." In 2003, according to the ABA, independents garnered 16 percent of book sales nationwide, up from 15 percent in 2002--the first time that share has grown since the 1990s. Although Kaplan would not give revenue figures for his company, sources put Books & Books' annual sales in the $3 million to $5 million range.

To keep customers coming into his store--rather than the chains and mass merchandisers that even Kaplan admits are far more convenient--he focuses on the model he has used since he opened in 1982. That model involves ambiance (such as the wooden floors and courtyard tables of the Coral Gables store), a specialization in topics of local interest (the Coral Gables store has a whole room devoted to art and architecture, for instance), and community building.

"They've built their reputation in a heavily competitive area against national chains on service, special events and strong communications with their customer base," says retail consultant Cohen.

Kaplan has also built Books & Books' reputation on the Miami International Book Fair. In 1983, a little more than a year after opening his first store, Kaplan and two other local booksellers were brought together by Miami Dade College president Eduardo Padron to help start a book fair in Miami.

The first book fair was two days, and featured 45 writers. This November, at the 21st annual event, Kaplan expects 300 writers and 500,000 attendees, enjoying presentations in English, Spanish, French and Haitian Creole, during the weeklong event. The success of the book fair led to a year-round literary presence at MDC, the Florida Center for the Literary Arts, which oversees the fair.

"The book fair creates a presence of the store in the book community in South Florida in a way that is absolutely essential to the store's success and prominence," says Domnitz.

In large part because of the book fair, Kaplan had a devoted customer base by the time Barnes & Noble opened a bookstore around the corner from him in Coral Gables in 1996. He needed it. Although today Books & Books' prices today are nearly on a par with the chains and mass merchandisers for everything but bestsellers, initially the Barnes & Noble discounted all books by 20 percent. "For those chain stores ... it was about growth, and not necessarily about profits at that time," Kaplan says. "And for any small bookseller, or any small businessperson, it's always about profit." Many independent bookstores closed during that time. Membership in the ABA went from 4,000 members in the mid-90s to fewer than 1,800 today.

"Mitch Kaplan is the grand old man of bookselling now in South Florida," says Vald Svekis, who started the Liberties bookstore in Boca Raton's Mizner Park (he sold the store in 1994). "I think that long-term following gave him somewhat of an insulation."

Kaplan hopes Books & Books will gain new devotees with his Bal Harbour and Delray Beach stores. But he also knows first-hand that expansion is not without its risks. Four years ago, when he moved from a 2,500-square-foot store in Coral Gables to a 6,000-square-foot one, he planned for sales growth. Then the Sept. 11 terrorist attacks hurt sales. "I overestimated the growth to some extent, initially," Kaplan says. He also says that today the company's sales per square foot at its two locations are well above the national average of $250.

Other independents have tried expansion, only to retreat and regroup. Used bookseller Books of Paige's expanded its space in North Miami several years ago. Even with a juice bar, special promotions and in-store signings, customers stayed away. "We absolutely just flopped with it," owner Michele Adams says. "People have got their new book need satisfied." The store has since returned to its specialty--used books--and moved back into a smaller space.

Still, Kaplan says, the risk is worth it. "Knowing the economics of the book business as I do, we have to be able to successfully leverage what we do well," he says. And his Lincoln Road location, where Books & Books opened its second store in 1989, may not last long because his current lease has only four years left on it. Kaplan says that, although he is committed to Lincoln Road, he may not be able to afford to renew at today's lease rates.

He remains, however, a devoted bookseller, even if that means something very different than it did when he first started the company in a 450-square-foot space. "It has been an incredibly competitive business, it has played out on a national stage," Kaplan says. "I never thought I would be opening a paper and seeing what my billion-dollar competitors are up to."

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