Based on information technology development and the poor reality of the market demand of paper books, this article analyzes the practical predicament of Chinese entity bookstores, which were adversely affected by online bookstores, digital reading competition, rising renting costs, thus having operating losses, being or having been shut down. The article then further analyzes that the entity bookstores are in urgent need of reform and innovation, relying on the national policy support, trying out diversified operating means, expanding the cultural function so as to adapt to the new reading and buying habits of readers, while maintaining their traditional operating model. This article builds a theoretical framework for entity bookstores to break their bottlenecks, through learning from the development experiences and business models of the foreign ones, and proposes operational advices on the basis of empirical research on the reform of Chinese entity bookstores.