PW: S&S Consumer Group Ready to Go It Alone

In a letter to consumer group employees and in an interview with PW, Romanos emphasized that as part of the sale a service agreement with Pearson has been signed that will provide the consumer group with specific services during a transition period. The service agreement covers various system support functions, but d s not involve such areas as sales, warehousing and customer operations, which will remain as part of S&S. "We will be able to perform all our normal functions," Romanos said.

According to Romanos, over time the consumer group will completely uncouple from the former S&S companies and will build a replacement infrastructure. Citing the service agreement, Romanos emphatically shot down speculation that a joint venture was in the works with another trade house, as suggested in some recent news reports. "We can afford our own infrastructure," Romanos said. The consumer group had a solid 1997, with sales of about $550 million and EBITDA (earnings before interest, taxes, depreciation and amortization) of around $75 million. Romanos noted that after the sale is completed, S&S will have made a 360-degree transition back to a consumer publishing operation. In his memo to employees, Romanos also noted that after the closing "we will drop the `consumer' from our name and once again be just Simon &Schuster."