Victims of the crash

Olsson's Books and Records, an independent five-store book chain around the Washington, D.C., area, thrived during the late '90s despite the onslaught of Borders and Barnes & Noble superchains moving in on its turf. In the end, it wasn't the bookstore Goliaths that killed Olsson's. It was iTunes.

The era of downloadable music lead to a sharp drop in CD and DVD sales. "It was plummeting music sales that contributed to our closing - and the soft books sales this year haven't helped," said Stephen Wallace-Haines, general manager of Olsson's.

At its peak a few years ago, Olsson's employed 200 workers and had nearly $16 million in annual revenues. But in addition to slumping sales, Olsson's struggled with real-estate costs and had trouble renegotiating its lease. The company tried cutting overhead costs and closing some of its smaller branches to stay alive, but "we waited too long," said Wallace-Haines. After filing for Chapter 7 in September, Wallace-Haines and his boss, founder John Olsson, pulled the plug.

"The community is going to suffer for us closing," said Wallace-Haines. "It's heart-wrenching."

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