Sales Slip, Earnings Fall at Simon & Schuster
By Jim Milliot -- Publishers Weekly, 8/7/2009 8:52:00 AM
Simon & Schuster’s domestic core publishing groups performed reasonably well in the second quarter with sales in the adult division up and children’s division sales flat. And while sales of e-books continued to “boom,” according to CEO Carolyn Reidy, sales in the audio group were off as were international sales which have been hurt by the softness in the U.K., S&S’s largest foreign market. The unfavorable impact of foreign exchange also hurt sales. Taken together, total revenue at the publisher fell 2.5% in the quarter, to $181.4 million, while operating profit tumbled 58.2%, to $6.1 million. S&S attributed the drop in profits to higher author royalties, lowering licensing and distribution earnings and a $2.2 million charge tied to a reduction in employees. During the first half of the year S&S did some restructuring in its children’s division after the appointment of Jon Anderson to head the group and moved its Howard Books division to Nashville which also resulted in some employees leaving the company; some cuts were also made in production.
Two conservative titles were among S&S’s top sellers in the quarter, Liberty and Tyranny and Glenn Beck’s Common Sense, and Reidy said she believes S&S’s Threshold imprint has “hit its stride” in finding the right mix of bestsellers and midlist conservative books. Other books that did well in the quarter included Jodi Picoult’s My Sister’s Keeper which benefitted from the movie, The Apostle, and City of Glass by Cassandra Clare and author who has developed into a solid bestseller for S&S with 1.3 million copies in print of her three books.
In general, Reidy said, the market proved toughest for some midlist books where it was difficult to find the right promotional tool, be it online or in traditional media. “You have to know exactly how you are going to publish each book,” Reidy said. As a result, most of S&S publishers are spreading out their lists and acquiring books more cautiously, Reidy said, “to give themselves the chance to publish each book correctly.” Given that approach, S&S could publish fewer titles this year than in 2008, Reidy said.
After a very bad first quarter, sales for the first six months of 2009 were down 11.4%, to $343.1 million, while profits fell 76%, to $8.2 million. Reidy was hopeful about the remainder of the year, noting that S&S had a “fantastic” July with gains in both frontlist and backlist. She speculated that could have been the result of major accounts finally re-ordering after months of clearing out inventory. A number of S&S’s best known authors have books set for the fall including Glenn Beck, Stephen King, Vince Flynn and Jeannette Walls.
