Pile of BooksLuke Johnson, former chairman of UK broadcaster Channel 4, who tried to rescue the ailing Borders chain, has warned High Street bookshops are finished. Johnson, who tried to turn UK Borders around before admitting defeat, says bookstores will be put out of business through a combination of supermarkets and the internet. Stores such as Asda and Sainsbury’s offer heavily discounted bestsellers, while you can get anything you want via Amazon.

The UK book market itself has shrunk by nearly 3% over the past 12 months.

“I bought Borders thinking we could turn it around,” he told the BBC. “I believed wrongly we could reverse the downturn in High Street book sales. It’s a great sadness that we couldn’t. In my opinion, the High Street book store is doomed.”

Publishers I’ve spoken to agree that the one-size-fits-all bookstore doesn’t have a future. But there is still room for independents that know their customers.

Christopher MacLehose, British publisher of Stieg Larsson (The Girl With the Dragon Tattoo), says that the collapse of Borders shows what happens when you try to apply a one-size-fits-all approach to bookselling. Waterstone’s is the only national bookshop chain left in the UK after the closure of Ottakar’s and Dillons. Ironically, the collapse of Borders has left the field wide open to Waterstone’s, which has a powerful retail proposition with its three-for-two paperback offers.

When Waterstone’s was founded in 1982, it originally gave a lot of leeway to individual book shop managers. Stationers WH Smith then bought Waterstone’s in 1993 and tried to make every shop the same. Current owner HMV Group has reversed the strategy and is beginning to give far more autonomy back to managers.

Mike Jones, Simon & Schuster’s non-fiction editorial director, says: “That is the key – for High Street bookshops not to try and compete with supermarkets, but to carve out their own markets which really engage with readers.”

Maclehose adds, “Independent booksellers have the freedom to exploit the interests of their customers because they know their tastes.”

Scott Peck, director of digital product development at HarperCollins, says that small bookshops can also make themselves more cultural destinations, with book clubs and coffee shops attached.

Maclehose says: “I’m utterly convinced that if you take the High Street out of the bookseller, the future is still there.”

Let’s hope the publishers are right. It would be an awful shame to lose the High Street bookshop.

Waterstone’s has announced a 70% slump in profits for 2009/10 to £2.8 million ($4.2 million). It caps a turbulent year for the chain, which has experienced supply problems through its centralised ordering system, made 650 staff redundant, and saw former MD Gerry Johnson exit in January. Waterstone’s stresses this was all before its new localised strategy was in place.

Barnes & Noble saw its shares slump by 16% yesterday on Wall Street after it warned of weak profits. The US chain has revealed a $32 million loss for the three months to May following a 3% drop in like-for-like sales in its bricks-and-mortar stores.

Rival US Borders recently refinanced its debt to stave off the possibility of bankruptcy.

And Amazon and Wal-Mart are outdoing each other online to see who can slash their prices the most.