Fledgling Kids Publisher Teetering
Jim Milliot -- 6/26/00
The attempt by entrepreneur Vincent G tt to become a major player in the children's book market appears to be unraveling. One year ago, G tt was confident that, fresh from attending its first BookExpo America, his company, Futech Interactive, was poised for rapid growth. The company had a number of acquisitions in the works and had shipped a series of books featuring its Talking Pages technology (News, June 21, 1999). Things have changed dramatically in the last year. Futech pulled its registration statement for a planned IPO in December, and since then G tt has been using a shell company that he took over, Janex International, to try to assemble a children's publishing company. Janex, however, is mired in debt, losing $6.2 million in the first quarter alone on minimal sales. The company has negative cash flow and estimates that it will need another $10 million in new financing to complete its pending acquisitions, as well as to continue operating for the next year. The owners of one of its planned acquisitions, Trudy Corp., said late last month that because of "substantial changes" that Janex wanted to make in its acquisition agreement, Trudy was canceling the deal. Negotiations between Trudy, which produces the Soundprints children's book-plus packages, and G tt had been going on for more than a year. "We couldn't wait any longer. It was time to move on," Trudy spokesperson Bill Carney told PW. Carney holds out little hope that the deal with Janex will be resurrected and the company is looking at other options. Trudy has been treading water since it signed a preliminary purchase agreement with Futech. Futech had served as Trudy's distributor, but stopped forwarding payments to Trudy in January, and Trudy took back its distribution in May. At press time, G tt had not returned phone calls made to Janex's Ph nix headquarters. Calls made to the company's Waukesha, Wis., office were met by a recording that said the office was "closed temporarily," and callers were referred to the Ph nix office. Meanwhile, Golden Books has filed a lawsuit against Janex, claiming that the company has defaulted on a $1-million note. Back To News---> |
