Gift Division Revamping Drops Profits at Nelson
-- Publishers Weekly, 5/31/1999
Thomas Nelson reported that sales for the year ended March 31, 1999, rose 3.4% to $261.6 million, while net income fell to $8.9 million from $12.7 million.The drop in earnings was due primarily to a one-time charge of $4.7 million connected to the restructuring of Nelson's gift division, C.R. Gibson. Earlier this spring, Nelson closed the remaining Gibson manufacturing plants in Connecticut and relocated its administrative and support staff to Nelson's headquarters in Nashville. Roughly 200 employees were affected by the changes. Last October, Nelson began downsizing the gift division when it cut approximately 100 manufacturing jobs (News, Oct. 26, 1998).
Nelson made further changes in its gift division last week, announcing that it was partnering with Word Entertainment Canada to handle the distribution of its gifts line in that country. Under the deal, Word will maintain all Nelson Gifts Canada sales personnel, although about 20 support functions will be eliminated.
Commenting on the restructuring of the gift unit, Nelson chairman Sam Moore said that by outsourcing the manufacturing operations, the company will be able to focus on the creative and distribution side of the business. Moore also indicated that Nelson's core publishing business "performed well in fiscal 1999."
Elsewhere at Nelson, the company reported that beginning June 1, it will unveil a new Web site, www.thomasnelsonpublishers.com. The new site will include the entire Nelson book catalogue and a range of interactive, promotional and informational features. Eventually, Nelson plans to sell books directly from the site.
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