Raincoast to Shut Publishing
Program, Refocus Operations
by Josh Kerbel -- Publishers Weekly, 1/8/2008 6:47:00 AM
Raincoast Books, the Canadian co-publisher and distributor of the Harry Potter series, is streamlining its operations, a move that will include cutting its workforce by 10% to 15%. Raincoast will close its Canadian publishing operations, originally launched in 1995, in order to focus on its distribution and wholesale businesses. Raincoast represents around 50 domestic and foreign-owned publishers, including Lonely Planet, Bloomsbury U.K. and Bloomsbury U.S. Over 80% of Raincoast’s business is generated by importing books from the U. S.
Raincoast will close its publishing program after its 15-title spring 2008 season. “This has been a necessary but very painful cost-cutting decision,” said Allan MacDougall, CEO of Raincoast Books; ”made all the more difficult by the exceptional calibre of writers and the staff we have cultivated over the last few years.” The domestic publishing unit, however, has been never been profitable.
Additionally, the company will consolidate its warehousing space, closing its smaller secondary warehouse in Mississauga, Ontario by March 31, 2008. All order fulfilment will now be from its Vancouver warehouse. Raincoast also plans to reduce the number distribution clients it handles in order to devote more resources to key publishers. As a result of the changes, Raincoast expects to reduce head count by about 20 people through layoffs and attrition. Raincoast and its Toronto-based division, Publishers Group Canada, continue to operate sales and marketing offices in both Vancouver and Toronto while BookExpress continues to provide wholesale services across Canada.
When asked if the company was seeking any form of creditor protection, Jamie Broadhurst, v-p of marketing, Raincoast Books stated that “no credit protection has been sought, in fact it has never been considered as the financial fundamentals of Raincoast remain very healthy. It is business as usual at Raincoast and the company continues to sell and ship books to customers on both sides of the border.” Broadhurst also added that the turmoil involving the bankruptcy of Advanced Marketing Services, a part owner of Raincoast, was not responsible for these cost cutting moves. “The announcements of cost cutting is a direct result of the impact of the appreciation of the Canadian dollar during Fall 2007,” said Broadhurst. “It is our belief that the retail book environment in Canada has irrevocably changed and that we must adapt in order to continue thriving as a company.”
