Largest Mormon House Acquires #2 Competitors in Publishing and Retail

by Jana Riess, Religion BookLine -- Publishers Weekly, 1/3/2007

Deseret Book, the largest LDS publishing house and retailer, announced last Thursday that it has acquired its closest competitor, Covenant Communications, for an undisclosed sum. As part of the deal, the Salt Lake City-based Deseret will also own and operate Seagull Book, the second-largest LDS retail chain, adding Seagull’s 26 outlets to Deseret’s 43 stores.

According to Gail Halladay, director of marketing and communications for Deseret Book, the company had been in discussions for several months with Lew Kofford, owner of both Seagull and Covenant. Kofford told the Deseret News that these discussions originally began out of some “adversarial” frustration within both Seagull and Deseret, as each retail chain was upset about how its book products were merchandised and marketed by the other chain. Over time, both parties realized that they had something to offer each other, and Kofford, who was seeking an “exit strategy,” decided to sell his businesses.

The combined total of 69 stores in the Western U.S. will make Deseret the largest retailer by far in the Mormon market, and the acquisition of Covenant’s publishing division cements Deseret’s position as the most formidable publisher for that market.

The companies will continue to operate independently as separate divisions within Deseret Book, with no layoffs or personnel changes (except Kofford, who is retiring). “There are no plans to merge companies, staff, or stores,” said Halladay. “Covenant will continue to publish the genres of books it has become known for, as will Deseret Book. This is similar to national publishing houses that operate multiple imprints, each co-existing under corporate ownership, such as Random House.” Halladay did note that the retailers will retain slightly different brand identities, with the Deseret chain being known as a full-service retailer and Seagull continuing to be known as a discount retailer.

Not everyone in the Mormon publishing world was thrilled at the news. “If it isn’t legally a monopoly, it sure feels like one,” said Kent Larsen, founder and publisher of the independent house Mormon Arts and Letters. No publisher, he said, “likes to have just one principal customer. This acquisition gives Deseret Book control of 75% of the sales dollars in the LDS market, and more than half of the perhaps 120 LDS stores left in the country. There are a few strong independents, but the smaller ones are just disappearing.”

Christopher Bigelow, editor and publisher of the upstart Mormon press Zarahemla Books, agrees that it will be harder to get his company’s books into LDS stores, but sees a silver lining from the publishing perspective: having just one major LDS press instead of two means that more authors are going to have to come to the indies, “who will now have even more manuscripts to choose from.”