Jashanmal Bookstores is to take over six retail outlets formerly run by the book chain Magrudy's, in a move that will double its retail presence in the UAE.
The retailer, which is part of the Jashanmal Group, will run the book stores that are part of Spinneys supermarket complexes in Abu Dhabi and Dubai.
Magrudy's said it decided not to renew contracts for the six stores because of a lack of growth opportunities.
"There was an opportunity to take over book stores inside Spinneys outlets," said Narain Jashanmal, the general manager of Jashanmal Bookstores. "It's six stores we're taking over."
Mr Jashanmal said the sites suited the company's business model, which favoured smaller retail outlets. "Ideally for us, we look for book stores in the 2,000 to 3,000 square-foot range," he said.
Isobel Abulhoul, a director and co-founder of Magrudy's, said the company chose not to renew the contracts at the Spinneys stores.
"We did not think it was worthwhile to keep the stores. We spoke to Spinneys and said this was not something we see growth in," she said.
Magrudy's chief executive, Jeremy Brinton left the group late last year "for family reasons", Ms Abulhoul said. The company also closed its outlet in Dubai's BurJuman Mall last summer.
"From being a very busy mall, 'footfall' began to go down. If people have different habits then we have to respond to that or we will be out of business in 10 years," she said.
Ms Abulhoul said Magrudy's was in good financial health. "We are one of the only companies that do not have any bank loans. We have substantial deposits. All our shops are doing well, we do not have a problem," she said.
However, she added that changes in the book retail business was squeezing the market as a whole. "Everyone is getting a smaller piece of the pie. We are being cautious and would be foolish otherwise. The world of book selling is undergoing seismic change." Jashanmal started operating the first of the six outlets, within Spinneys at Mercarto Mall in Dubai, last week. The next to open is on Jumeirah Beach Road, followed by Khalidiya in Abu Dhabi. Jashanmal will also operate stores in Spinneys outlets in Dubai's Meadows Town Centre, Silicon Oasis and on Trade Centre Road in Bur Dubai.
"It's effectively doubled our retail footprint," said Mr Jashanmal, adding the firm previously had six stores in the UAE.
"We feel we have quite a lot of insights into the demographics of these shoppers. We think we could tailor the range a bit more specifically," he said.
The chain also plans to open a store at the Al Ghurair mall in Deira, Dubai, at the end of next month, Mr Jashanmal said.
The Jashanmal Group also comprises a print media distribution arm, and counts Spinneys as one of its largest customers for newspapers and magazines.
Globally, traditional book-store sales have been pummelled by competition from internet retailers such as Amazon.com, and the rise in popularity of e-books. Borders, one of the biggest chains in the US, filed for bankruptcy last month, in the face of declining sales and a debt-laden balance sheet.
In the UK, the struggling music and book retailer, HMV, is looking to sell its Waterstones chain on the back of fewer customers.
Despite this, Mr Jashanmal said the "book business is a business we see a good future in".
His company has an online store hosted by Souq.com, through which consumers can choose from 3,000 book titles for home delivery, or to collect from a store. "We want to expand that to 15,000 titles Ö we want to do that by June," said Mr Jashanmal.
"We're going now around 60 to 70 [online] transactions a month. The average is about four to five books per transaction. It's below our expectation, but encouraging enough for us to continue to invest in that channel."
Online shopping in the UAE still represents a small part of total sales and e-books are yet to take off to the same degree as in Europe and the US. But e-commerce in the UAE is expected to grow by 72 per cent to about US$33.7 million (Dh123.7m) by 2014, according to the data research company Euromonitor.