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Page One eager to move past Chapter 11

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Copyright © 2012 Albuquerque Journal

Page One is moving to its next chapter after reaching the final stages of bankruptcy proceedings.

Owner Steven Morado Stout said going through the bankruptcy process “has been tremendous because it’s given the bookstore new life.”

Stout says community support and approval of a plan by a judge in January for the store to exit bankruptcy has kept one of the largest independently owned bookstores in New Mexico open and moving forward in business.

He has called the decision to enter bankruptcy a difficult one with no guarantees but added in a news release earlier this year: “The community rose to the occasion and gave us their support in more than words. Folks who hadn’t been to the store in years came by in droves to let us know they felt we were important enough in the community to support.”

The company is currently “cleaning up some administrative things” on the case, but Stout expects to get a final decree from the court within the month.

In the meantime, the store celebrated 31 years in business at the end of March.

Bankruptcy

The company filed for Chapter 11 reorganization in February 2011 listing just under $1.4 million in debt and about $800,000 in assets, according to court documents. Stout was listed as the largest secured creditor, owed $453,393, followed by Bank of the West at $250,000.

Under the plan approved by the court, the company has set up payments to publishers on a quarterly basis over the next five years and to Bank of the West on a monthly basis over 15 years, Stout said.

Stout says he would like to increase payments to the bank as the company moves forward.

“The more capital we raise, the more quickly we can pay people,” he said.

Stout is not allowed to reimburse his claim against the company as part of a Chapter 11 filing, “so that’s just gone,” he said.

“The alternative was a bankruptcy sale and pay myself and the other people,” Stout said. “I’m just sort of stubborn that way.”

Seeing changes

Stout started the company in 1981 with the purchase of a newsstand, which he eventually turned into a bookstore. The company began selling used books in 1993 when Page One moved across the street to its current 25,000-square-foot location and its former 10,000-square-foot store became Page One Too. The two merged under one roof in 2008.

Over the past five years, the store saw a decrease in sales and an increase in debt. “Five years ago we were just borrowing more money and we didn’t have a way out,” Stout said.

There are far fewer employees – 18 now – than the 41 five years ago, but “staff is more unified” these days, he said.

“They are ready to fight the good fight. They don’t want it to disappear,” Stout said.

Inventory and sales also favor more used books over new compared to five years ago.

Currently, about 55 percent of inventory is new while 45 percent is used. Five years ago, that split was 70 percent new and 30 percent used.

Sales of new titles make up about 60 percent of business today, compared to 75 percent five years ago.

“We’re going to keep the new and used (offerings) but I think inventory is slowly becoming more used just because of customer demand,” Stout said.

The store carries about $1 million in inventory and more than 100,000 titles on its shelves, Stout said. That number is similar to five years ago.

The closure of Borders last July and Hastings on Tramway and Candelaria NE at the beginning of the year also created more demand for Page One since there was “less availability of books in our neighborhood.”

Moving forward

The trend toward the sale of more used books will continue, Stout said.

“It’s more affordable (for the customer). It’s more affordable for the business,” he said.

However, profits based on selling only used books “sit on a fine, fine thread,” Stout said.

“The people that work in used books, it’s a passion. It’s not a job and it’s not an investment,” he said.

Stout says he sees the business staying in the same location for the next year. He is hoping to renew the lease on the space Page One has occupied since 1993.

“I’m guessing if my health holds up I’ll do this another 20 years,” he said. “I’ve always thought we are a resource not just for this community for the state.”

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