Perseus Could End Harper Ties

By Steven Zeitchik, PW NewsLine -- Publishers Weekly, 12/3/2004

Perseus is confirming sources' reports that it is considering other companies to handle its fulfillment and replace HarperCollins, its current provider.

Perseus chief David Steinberger acknowledged that the company had notified Harper of its thoughts and had conversations with other potential providers, though he didn't rule out the possibility of staying with Harper. "We have an outstanding relationship with Harper; the service they provide has always been excellent and they're great partners, but we have to look at every aspect of the company to make sure we're set up in a way that supports our long-term strategy, which involves aggressive growth."

Until 2002 Perseus actually used Harper to handle all sales and distribution, but after the acquisition of Running Press, word began to fly that the company would build its own sales force. Two years ago the company announced it would use Running to handle sales while retaining Harper for "customer service, warehousing, distribution, billing and credit functions" as well to sell titles into the ID wholesale market. The agreement was described as long-term, but Perseus has the option of exiting early, sources say. (We're hoping to get more form Harper, whom we didn't get in touch wtith on deadline, for our next issue.)

The move, if it happens, would mean the final break for Perseus from the company that helped spawn it (though several key members of its staff, including Steinberger, come from Harper.) Perseus has stressed growth, both from within and without, as a priority, and sources say the economics of its current arrangement might not be as cost-effective for a publisher looking to add imprints and titles.

Steinbeger declined to name who might be a candidate, but it's reasonable to expect the company would need a large provider for what experts peg as a $100 million business. Names like Simon & Schuster and Time Warner are likely to come to mind for those who follow such things; they are large, but probably not too large, for an outfit the size of Perseus.