Iris Barel, CEO of the Steimatzky book store chain, is confident that electronic books do not spell the end of printed literature, but she is still taking steps to ensure the retailer's place in a rapidly evolving market.

"Digital will not destroy traditional literature, but print books are likely to fall to just 20% of the market in the coming years," Barel said in an interview with TheMarker during Hebrew Book Week.

"I'm not afraid of change and see it as an opportunity," she said, "so we have entered the digital arena and are deepening our presence there."

Barel got her start in insurance, not in books, and was in the field for two decades as an independent professional. Over the years, she sold three companies she had started - the first in health insurance that she sold to Yair Hamburger of Harel Insurance and a second to Mivtach Shamir. In 2000 she set up a third health insurance business with Yonel Cohen, now CEO of Migdal Insurance, as a unit of Mivtach-Simon Insurance Agencies. The business was sold six years later to Migdal.

Barel has been CEO of Steimatzky since 2006, a year after the Markstone Capital Group, a private equity fund, acquired the chain from Eri Steimatzky for a sum estimated at $50 million to $60 million. She came to Steimatzky via a headhunting firm and was hired on the basis of what she said was good chemistry between her and Amir Kess and Ron Lubash, the two principals of Markstone.

Today she manages a business of 1,200 employees and 145 branches, only four of which are franchised. The name "Tzomet Sfarim" is never uttered by her; it is simply "the competition." But she stresses that whatever bad blood runs between the country's two biggest book retailers is at the level of ownership, not management.

Barel, 57, is seeking to supplement Steimatzky's retail print operation with new ventures and incentives to bring people into book stores.

"We have set up a literary incubator that publishes manuscripts that have been sitting in people's desk drawers. We have set up one of the biggest customer clubs in Israel," Barel said.

For the past year-and-a-half, Steimatzky has been promoting a policy of special offers for books. Tzomet Sfarim has had such a policy for the past five years, in which it offers four books for NIS 100. "We have honored our promise made a year-and-a-half ago to be the lowest-price chain in Israel," said Barel. "We have no choice but to develop."

Barel has the competition on her mind even in her off-hours. "I have a sickness. Whenever I attend an event I check how many gift bags are ours and how many are the competition's," she said. "When the ratio is 90% to 10%, or at least 80% to 20% in our favor, I'm relaxed. If it's less, I get restless. My bible is the book 'Only the Paranoid Survive' by Andy Grove, one of the founders of Intel and its first CEO."

But Barel said she tries to rise above rigid partisanship in business, noting that among the prizes the chain will award to authors of best sellers this year - including Eshkol Nevo, Shemi Zarhin and Zeruya Shalev - Nevo's book "Neuland" is published by Zmora Bitan, which, she notes, "owns our competitor." "I would have been more comfortable if the author had a different publisher, but Nevo will get NIS 25,000 from Steimatzky because we are fair. We have to remember who is the source of our livelihood."

These days Barel is looking to form an investor group from Israel and abroad to buy the chain from Markstone, which will have to sell it by 2015. If she succeeds, Barel said she hopes to become chairman; if not, she will look for "another challenge."