Nelson Pulling Out of BEA, ICRS

By Lynn Garrett -- Publishers Weekly, 4/16/2008 8:38:00 AM

Thomas Nelson dropped a bombshell late yesterday when it announced that it is pulling out of both BEA and the International Christian Retail Show (ICRS), the summer show of CBA, the association of Christian retailers. The announcement came on the heels of Nelson’s first Open House event for Christian retailers, held last week (April 10-12) in Nashville.

Open House was created as an alternative to Nelson’s participation in Advance, CBA’s winter trade show. Soon after Nelson announced its abandonment of Advance, the show was cancelled and replaced with an Industry Conference that drew disappointing participation. Now Nelson has decided to abandon trade shows altogether.

In a statement, Nelson CEO Michael Hyatt said, "The current economic downturn is forcing us to reevaluate the expenditure of every marketing dollar. We are committed to doing our best to support our products and distributors with marketing expenditures that result in greater sales. And we have determined that, for Thomas Nelson, these trade shows provide very little return on a very significant investment."

Asked how this decision reflected the company’s recent performance, Hyatt told the PW, “We’re doing well—we just completed our biggest year ever. But it was still not as good as we hoped, so we’re certainly seeing the impact at retail.” At Open House, Hyatt noted that “23% of our total active SKUs [approximately 5,000 active titles] drove 80% of our sales in [fiscal] 2007.” He added that Nelson will cut its output in half in 2008.

CBA president Bill Anderson responded to Nelson’s move with a statement: “Christian retailers don’t have time to go to see all of their suppliers individually, so they come to [ICRS] where they can do business with 400 suppliers under one roof, and in four days conduct a large amount of both short-term and long-term business.... Thousands of retailers as well as other key players in our industry will be sorely disappointed that Nelson is not there....”

Said Hyatt, “I appreciate what he has to say, but we are in the best position to decide how valuable the show is to us. It’s just not the best way to meet with customers—there’s too much noise and competition, and fewer retailers all the time.”

Nelson plans to make Open House an annual event for its key Christian accounts, who attend with all expenses paid by the publisher. "The top 100 Christian retail accounts generate more than 80% of our revenue in this channel," Hyatt said. More than 240 retailers attended the inaugural event. In that light, dropping out of ICRS might make sense, but what about the other channels? “In the general market, 25 accounts make up 95% of the sales—it’s even more consolidated than ever in the general market,” he said. “I don’t think an event like Open House works for them. Plus, we meet with those accounts once a month, so we’re getting lots of face to face. A trade show is just an expensive redundancy.”

As for BEA, Hyatt said, “My guess is that 95% of the people walking around are other publishers, authors and agents. As one of my colleagues said, we’re all getting dressed up for each other. So I don’t think it really helps us build our profile in the general market. The best thing we can do for that is publish books that hit the bestseller lists.” (At the its booth at the London Book Fair, a BEA representative told PW the organization has already had two inquiries about Nelson’s space.)

Lance Fensterman, v-p of BookExpo America, said the organization is “not entirely surprised, but disappointed.” Since Nelson had already pulled out of one trade show, ICRS, Fensterman and his team were aware that the publisher might be changing its approach to trade shows. Fensterman added that “we will not have any problem whatsoever selling that real estate,” referring to the 1,000 square feet of space the publisher had reserved in the South Hall of the L.A. Convention Center. 

In response to Hyatt's comments about BEA catering too heavily to industry types, Fensterman said the show is "the second largest trade book fair in the world, representing the largest book market in the world. So I don’t really feel that we are necessarily getting dressed up only for each other." He added that, at its core, the show is "about the books, the booksellers, authors and launching product and always will be."

In his blog Hyatt wrote, “One of our Core Values is to Honor God. One of the behaviors related to that is, ‘we honor our commitments, even when it is difficult, expensive, or inconvenient.’ As a result, we will honor any financial commitments we have made to BEA and ICRS. In fact, we have already paid in full for our booth space, despite the fact that we will not be exhibiting.”

Does Hyatt think Nelson’s defection from BEA will lead to a chain reaction? “I’ve listened to other publishers complain about trade shows for years and wonder out loud whether it was worth the effort and the expense. They will have to evaluate where the trade shows fit in their overall strategy to connect to customers. But given the current economic environment, everything is coming under scrutiny.”