BookStream Slows As It Waits for Funding

by Judith Rosen -- Publishers Weekly, 11/14/2008 7:31:00 AM

BookStream is counting on Santa coming early this year. Two and a half years after the indie distributor based in Poughkeepsie, N.Y., became fully operational, it has had to scale back its inventory while it awaits an infusion of cash. According to president and CEO Jack Herr, the capitalization could come as early as Thanksgiving, although that might still be too late for BookStream to take full advantage of Christmas sales, since it would take another three to five weeks to rebuild its inventory.

Predicated on the concept of leveling the playing field by offering retailers a flat 42% discount on all orders, BookStream’s financial problems stem from a different kind of leveling. Some publishers burned by the bankruptcies of both Koen and AMS have been reluctant to extend credit to the company. Now Herr is hoping to put those problems behind him by raising several million dollars instead of incremental funds as he has since the company’s start. “It would solidify our presence,” said Herr, “and put us on a pathway to steady growth until such time as trade credit comes.”

That’s not to say that BookStream isn’t continuing to ship new orders. “Books come in every day and go out every day,” said Herr. “We are experiencing not nearly the fall off of order volume we expected. We have developed a solid base of customers who like what we do and continue to put us at the top of their cascade.”