Kinokuniya Bookstore, Culture Convenience Club, and Nippon Shuppan Hanbai begin discussions to realize bookstore-led publishing distribution reforms

2023.06.23 Press Releases
Culture Convenience Club Co., Ltd. / Kinokuniya Bookstore Co., Ltd. / Nippon Shuppan Hanbai Co., Ltd.

- Establishment of a joint venture to support bookstore-led publishing distribution reform and its realization -

Culture Convenience Club Co., Ltd. (President and COO: Takahashi Yoshinori, hereinafter referred to as "CCC"), Kinokuniya Bookstores Ltd. (Chairman and CEO: Takai Masashi, hereinafter referred to as "Kinokuniya"), and Nippon Shuppan Hanbai Co., Ltd. (President and CEO: Okumura Keiji, hereinafter referred to as "Nippan") have concluded a basic agreement to begin discussions toward bookstore-led publishing distribution reform and the establishment of a joint venture to support its realization.

1. Background and Objectives

The publishing distribution model is facing various crises due to the shrinking size of the print media market as times change, the high return rate that is a negative aspect of the traditional consignment sales system, and rising logistics costs. The number of bookstores across Japan has decreased by about 30% over the past 10 years, and more than a quarter of municipalities across the country have no bookstores. (As of September 2022/Research by the Publishing Culture Industry Promotion Foundation)

Bookstores, places where readers of all ages, from children to the elderly, can encounter books and serve as hubs for local interaction, are disappearing all over the country.

In response to this current situation, we have decided to undertake a bookstore-led reform of publishing distribution, with the desire to carve out a rich future in which bookstores will continue to exist in local areas, more people will develop reading habits, and they will continue to have contact with ``knowledge'' and ``culture'' through books. Based on this vision, the three companies will begin discussions aimed at creating a publishing distribution cycle that will enable each publisher to continue delivering a wide variety of publications to readers across the country through bookstores, and at reforming the system to make this cycle sustainable, thereby contributing not only to the growth of the industry but also to the development of Japanese culture and society.

2. Matters to be discussed

(1) We aim to establish a new direct purchasing scheme in which bookstores and publishers decide the number of items to be shipped while committing to sales and returns. By increasing the number of transactions with gross profit margins of 30% or more, we will improve the financial soundness of our bookstore business and realize a future where bookstores will continue to exist in our towns and cities.

(2) In establishing this new direct purchasing scheme, we will utilize the systems, infrastructure, and single-item sales data owned by Kinokuniya, CCC, and Nippan to minimize lost sales opportunities due to stockouts, increase sales, reduce returns, and achieve environmentally friendly distribution, thereby improving the benefits for all parties: readers, bookstores, distributors, and publishers.
① Achieving optimal purchasing based on highly accurate demand forecasts using technology such as machine learning (AI ordering system)
②Realizing sustainable distribution based on ESG (environmental and worker-friendly distribution) with appropriate amounts at the right time
3) Implement new sales promotion and recommendation measures, including cross-bookstore services and common apps, to increase the number of buyers and purchases by improving user convenience.

(3) In order to effectively promote the new direct purchasing scheme, we will consider establishing a joint venture company with investments from Kinokuniya Bookstores, CCC, and Nippan.

In order to build a richer future, we aim to create an open system that allows other bookstores that share our aspirations to join us.

3. Business Scheme

4. Schedule

The three companies will promptly begin discussions and explain the situation to other bookstores and publishers.
We will proceed with preparations to formulate an action plan and establish a joint venture company, with completion targeted for autumn 2023.

Comment from Masashi Takai, Chairman and President of Kinokuniya Bookstores Co., Ltd.

We have now decided to create a sustainable publishing distribution cycle by working together with bookstores and distributors to implement "publishing distribution reform centered on bookstores."
We believe it is our mission to keep bookstores alive as a "disseminator of culture and information" and "infrastructure of knowledge," and to pass on publishing culture.
First, the three companies will work together to establish a new purchasing system while taking advantage of the strengths of each bookstore, and aim to work together with other bookstores that share the same aspirations.

Materials related to this matter

Kinokuniya Bookstore, Culture Convenience Club, and Nippon Shuppan Hanbai begin discussions to realize bookstore-led publishing distribution reforms

For inquiries regarding this matter, please contact:

Culture Convenience Club Co., Ltd. Public Relations Office　
TEL: 03-6800-4764／MAIL: inquiry@ccc.co.jp