Does anyone know whether bookstores like Borderlands sell their inventory on consignment, similar to newspaper/magazine stands? Or does the business purchase books at a wholesale price and hold that inventory on the balance sheet?
If it's the latter, it would seem like a wise move to reduce inventory by x% and re-allocate the space/funds towards the more profitable cafe, where prices have a better elasticity.
Another thought would be to re-orient the inventory towards self-published works (where there's no publisher setting a price), rare edition classics (where there's higher markup due to low supply), and pop-culture best sellers (which have high turnover). I think that a brick and mortar bookstore is as good as the people working there: if you can find one with an employee that's engaging, extremely well-read, and can recommend books, you could conceivably make a bookstore geared towards self-publishers work. Bonus points if you could provide services to self-published authors to print their works in a beautiful, professional, yet economical package.