The Dollar Hits Canadian Publishers....Again  

by Joshua Kerbel -- Publishers Weekly, 10/27/2008 7:46:00 AM

For the second time in as many years, the Canadian/U.S. dollar exchange rate is playing havoc with Canadian book publishers and distributors. On the heels of its 17.5% surge to a high of US$1.1024 on November 7, 2007, the Canadian dollar is now down more than 20%, falling to US$0.7845 on October 24, 2008, levels not seen since mid 2005. “The decline has been so rapid and steep that there's hardly time to adjust for the majority of new titles coming in for the holiday season,” said HarperCollins Canada CEO and president David Kent. “This is the opposite situation from a year ago.” Judy Brunsek, v-p, sales & marketing at Kids Can Press, sums up the problem facing her company and the industry in general. “We do our pricing a year in advance so last fall’s currency situation influenced our pricing for this fall,” she said. 

“Retailers can do what publishers are prevented by law from doing, which is stickering higher Canadian prices,” said Kent. “They can also broadcast to their customers that books are now a terrific value.” However, retailers may be reluctant to raise prices just because publishers are taking it on the nose. Joel Silver, chief merchant at Indigo Books & Music, said the country’ largest bookseller has not moved any prices. “The publishers control the pricing on the books and because it happened so fast and they were already printed and loaded into the stores, the was no opportunity to re-price.” He expects adjustments to come when publishers reprint for the spring and fall. Silver is hopeful, however, that because of the lower prices “books are well positioned for this holiday.” And as Raincoast’s Jamie Broadurst noted, “readers do not need to take out a line of credit to buy a book.”

Although the recent fall in the Canadian dollar should have been easy profit for Canadian firms selling into the U.S., it is not the case across the board. “The prices on Canadian 2009 titles being shipped into the U.S. will be either at par or decrease 15% to 20% depending where individual titles are in the manufacturing process,” said Stephanie Stewart U.S. sales & marketing manager Fitzhenry & Whiteside Ltd., about the books the company publishes and distributes in the U.S. and U.K. “In terms of our own publishing programs, we're in the same boat as the publishers we represent on our distribution side. All in all, it's a mess as there is not one magic wand solution.”