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At Waldenbooks Co.'s annual party for New York book publishers last month, the nation's largest bookseller did things in a appropriately big way.
Publishers fed on champagne and hors d'oeuvres in the New York Public Library's Astor Hall. A floor show included four singers and dancers introducing Waldenbooks' chief executive, Harry Hoffman, with lines set to the tune of "That's Entertainment":
"You know they won't stop while he's at the top he's Harry Hoffman."
The tall, plain-speaking Mr. Hoffman then stepped to the podium, and said, "I can't sing or dance, but I think I can sell books."
But staying on top of the book business is tougher than ever for the Stamford-based company, a unit of K mart Corp. Not only have profit margins been shrunk by discounting, but its own effort to create a discount-book chain in the New York area has been far from a success.
So Waldenbooks is revamping its response to discounters by scaling back its own discount chain in favor of units in K mart stores. And it is turning to an ambitious super bookstore -- called Waldenbooks & More -- to propel growth by selling everything from computer software to stuffed animals.
"Walden has been smart; they have to be," says a publishing industry observer. "Instead of standing still they have targeted different kinds of book buyers and have the sense to know books aren't the only thing they can sell."
When Mr. Hoffman came to Waldenbooks seven years ago, it sold only books. Now the 932 Waldenbooks outlets get 17% of their sales ($565 million last year) from such items as board games, learning tapes, greeting cards and stuffed toys. By 1988, non-book items are expected to represent 25% of total sales.
Despite Waldenbooks' lucrative diversity in the bookselling business, Mr. Hoffman admits discounters have hurt his company, whose name is derived from Thoreau's Walden Pond. In New York City, discounting has long been a factor because of Barnes & Noble. Outside the metropolitan area, Crown Books of Landover, Md., has rapidly built an aggressive chain of discount bookstores concentrating on best sellers.
In response, Waldenbooks tried its own hand at discounting. Last year it closed five conventional, money-making Waldenbook stores in the New York area,...