Former bodyguard Alan Beatts took a big gamble by opening a bookstore at a time when chains like Borders and Barnes & Noble and internet merchants like Amazon.com were claiming an ever-bigger share of the market.

So Beatts decided to improve his odds by specializing in the science fiction and horror books he'd always loved.

It was a smart move. A decade later, his Borderlands Books is thriving in San Francisco's funky Mission District. He sets up tables at horror and science conventions, and the genres' authors stop by for readings and book signings. Most importantly, nine out of 10 customers don't just stop in for a quick paperback. They keep coming back.

"They are very appreciative," Beatts said of his passionate customer base.

He estimates he's seen double-digit growth in each year since Borderlands opened. "There's an assumption that we have something in common which doesn't exist in the general interest stores."

In general, times remain tough for most locally owned bookstores; the American Booksellers Association in Tarrytown, N.Y., said fewer than 40 per cent of books are now sold by independent stores.

Even in intellectual hubs like Berkeley, flagging sales recently led to the closure of a vaunted institution, the flagship store of Cody's Books near the University of California campus. And in Cambridge, Mass., the eclectic WordsWorth Books closed its doors in 2004 after nearly 30 years in Harvard Square.

Genre stores, specializing in literature ranging from fantasy to religion, have bucked this trend by catering to inveterate and demanding readers. Booksellers in Southern California, New York, Minneapolis and elsewhere are finding ways to be profitable by targeting specific markets.

"A niche definitely helps us," said Dave Nee, founding partner of the Other Change of Hobbit, a Berkeley store that specializes in fantasy books by authors like J.R.R. Tolkien.

"We're really an adoption agency. We find books that people will want to read and hook them up with them," he said.

His store lures back customers with the expertise of employees, their devotion to the genre and their honest opinions. There is a benefit to seeking out obscure authors and titles: bestselling authors like Stephen King are not a big part of the store's business because it can't compete with the big markdowns at national chains.

"Our big popular titles are things we have read and liked and recommend," said Nee.

Jovanka Vuckovic, editor of Rue Morgue, a monthly horror magazine based in Toronto, said horror and other specialty genres draw a specific type of reader, one who is always looking for new voices.

"Horror fans are total regulars and they are rabid fans and consumers," she said. "When you're a horror fan you're a horror fan for life. It always sticks with you. You rarely meet someone who says 'I loved horror films as a kid but I don't watch them anymore.' "

Such readers are also willing to pay a little extra for special editions by their favourite writers, said Barry Hoffman, the publisher at Colorado Springs-based Gauntlet Press, which sells to individual readers as well as bookstores.

"The niche stores are the ones that continue to survive and thrive because they can do things that chains can't do. People seek them out," said Hoffman, who is also a horror author of mass market titles such as Judas Eyes.

Burbank's Dark Delicacies only sells horror-related books and merchandise. It divides its collection into categories like werewolf novels, vampire novels and books about horror films.

Owner Del Howison said choosing the right spot is critical. Dark Delicacies' proximity to Hollywood allows the store to host DVD and poster signing parties, feature horror authors with Hollywood ties and sell to a receptive clientele.

"We're the epitome of location, location, location," Howison said. "I wouldn't even know what to buy in a general bookstore. If you deal in something you don't know you're going to be in big trouble."