DeseretBook buys Seagull, Covenant: A Case study.

Chris, isn’t this rather short term thinking? Seems to me that keeping the two separate brands is a smart move (of course, I’m not sure that DB will actually keep them separate in the long term…), as Sheri Dew suggests, along the lines of many different retailers (she mentions Nordstrom specifically). DB reaches two major segments of the LDS retail market this way.

But then, IMO, the acquisition itself is rather short term thinking. Russell, won’t this cause new public relations problems for DB? From my read on attending 10+ years of LDSBA conventions, most independent booksellers and publishers are already quite suspicious of DB — this gives them such a clear domination of the market that they aren’t likely to be very happy. Other LDS publishers are likewise suspicious of DB. But no one feels at ease to say much because they simply have to sell to DB, and because DB is owned by the Church.

Now this move has the potential to get customers upset, as DB takes advantage of the fact that it owns both chains (and, IMO, it is inevitable that they do so, possibly without realizing the damage they are doing to their reputation).

It kind of reminds me of the annoyance and anger many computer users feel at Microsoft. Yes they keep buying Microsoft products, but there is a significant frustration with the computer giant, because of how often they feel forced to use MS products.

Won’t consumers of LDS books become increasingly frustrated with DB, as their choices are limited through this acquisition?

Huh? Everyone knows about a lot of these kind of separate branding situations. I don’t think that they don’t matter — people shop at particular retail stores because of their perception of the store, not because of who they know owns it or doesn’t own it.

Perhaps you can’t draw too many comparisons between Microsoft and Deseret Book (which is, BTW, more than just a chain of bookstores — it is also a publishing company, which is perhaps somewhat closer to Microsoft). My point is not that the situations are identical, just that the public perceptions of the companies are becoming similar. [Both large companies dominating thier industries, both taking actions that alienate segments of their customers, competitors and partners, both taking actions seen as anti-competitive).

I think you might enjoy a more indepth analysis of this situation. I’ve given it a good look on Motley Vision and plan on posting more.

And yesterday I completed a two-hour long interview on the LDS industry that can be found at Mormon Stories.

Yes you can buy some LDS products from Amazon.com, walmart and other places. But Deseret Book (at least) specifically keeps some of their products from these markets (sounds like Microsoft, which keeps those who don’t use windows from using some of their products, such as Microsoft adCenter). These non-LDS stores are also not organized so that LDS products can be found easily. And the wide perception in LDS books is that these stores either don’t have LDS products, or put them alongside other, anti-mormon products. As a result, there is a significant breach between the LDS market and the rest of the book market in the US.

Technically, you are right. DB is not a legal monopoly. But if it walks like a duck, looks like a duck and quacks like a duck…

If its not a monopoly, it sure feels like one.

Deseret Book stores and Deseret Book publishing are both part of the same company. Supposedly there is a “wall” between the two companies, but in practice it doesn’t seem to be much of a separation at all.

Seagull Book and Covenant Communications were both (before this acquisition) owned by V. Lewis Kofford. Again they were supposedly separate companies, but in practice they certainly cooperated.

Smaller LDS publishers have long noted that when it comes to the Christmas season, for example, Deseret Book stores tend to promote Deseret Book titles heavily and Seagull Book stores have promoted Covenant Book titles over others.

If the companies were truly separate, would there be such bias?

I too can see the two store chains run as separately branded stores, like Banana Republic/Old Navy. There is a certain marketing logic to this.

But they could also end up like KFC/Taco Bell, where many locations share both brands, but do so in a single building and sharing staff. I’m not sure of all the logistics of how that might work (and I don’t expect to see shared locations any time soon), but in some locations, where the market isn’t big enough to suit DB, it might be done to save costs. Of course, they would then have to define which titles should be discounted (and therefore sold by Seagull) and which should not.

It is also possible that 3 or 5 years or more from now, DB will decide that maintaining two different brands costs too much money and causes too many management difficulties, and eliminate one of the brands.

Regardless, as I’ve tried to cover at Motley Vision and in the podcast interview I gave at Mormon Stories I can’t see how this is a good thing for anyone in the LDS market, except perhaps for Deseret Book itself and for Lew Kofford.