PGI: Primed for the Future
Bridget Kinsella -- 2/28/00
With sales topping $120 million, PGI celebrates its transformation to distributor/publisher
To say things have been going well for Publishers Group Incorporated would be to put it mildly (News, Jan. 31, 1999). Over the past 10 years, sales for the company's distribution arm, Publishers Group West, have increased fivefold, and last year PGI's total sales reached $120 million. Last summer, the company opened a new state-of-the-art distribution center in Reno, Nev., and sales have increased even more as a result.
Now, with its most recent acquisition, of John Muir -- the fifth such deal for its publishing arm, Avalon Publishing Group, in 12 months -- PGI has completed a corporate transformation that began several years ago and has emerged as a company that is approximately 75% distribution and 25% publishing.
"Now that we're a $120-million company," said Charlie Winton, PGW founder and CEO of PGI, "Publishers Group West as a distributor needed to have a presence as a publisher in order to have a higher sense of security in terms of its billing base and the services and infrastructure it could offer."
To formalize and maintain its separate interests, the holding company Publishers Group Incorporated was formed in 1994. PGI oversees both PGW, the distributor based in Berkeley, Calif., and Avalon Travelers Group, the publisher based in both California and New York.
Winton said the company began to move closer to becoming a publisher in the late '80s with investments in the projects of some of its client publishers. Then, in 1992, as PGW, the company bought a controlling interest in Moon Travel Handbooks. Two years later, it formed Avalon. And the year after that, Avalon bought controlling interests in Thunder's Mouth Press and in Marlowe & Co.
But the publishing momentum really picked up steam after PGI added a new outside investor, Sycamore Hill, to its board in 1997 as part of a capital-raising plan. "We used a substantial part of that capital to vamp up the acquisitions in the last two and half years," said Winton.
Indeed, within just the last 12 months, PGI wholly acquired Carroll & Graf, Foghorn Press and John Muir, and bought the remaining interest in Moon and a minority interest in Seal Press. Given the transformation of the company in a relatively short time, Winton, who was made CEO last year, said he is most satisfied that the corporate culture, which he described as "wonderfully special and kinda kooky," remained intact. "I don't claim responsibility for it singularly," he added.
But it was Charlie Winton who founded PGW 23 years ago. In the beginning, he was a failed filmmaker and recent Stanford grad in need of a job. A quick stint working in the warehouse of Page Pickland Publishers convinced Winton that independent presses needed better representation to the trade. Thus, PGW was born. About a year later he packed up his operation in Monterey -- everything fit in one U-Haul -- enlisted the help of his younger brother, Mike, and former Stanford classmate Randall Fleming, and established the company in Emeryville, Calif.
Now, more than 20 years later, the Wintons, with Charlie as CEO, Mike as COO and Fleming as CFO, still constitute the majority of the management team. The others, Mark Ouimet, PGW's executive v-p, sales and marketing, and Susan Reich, Avalon's COO and publishing director, have logged in some miles with the company as well. Ouimet has been with PGW for 10 years. Reich's eight years of service were briefly interrupted in 1995 -- 97, when she served as publishing director of Harper San Francisco and then as an independent consultant. One of the newest members of PGW is Trigg Robinson McLeod, who was hired in late January as director of marketing. She previously worked as v-p, director of publicity at Broadway Books.
From its inception, PGW was a company of friends and family. Winton said he likes to think that the consistent management team has helped the company grow and evolve, but not lose its character. That corporate character is evident to any visitor to PGI's new salmon-colored headquarters stationed at the edge of a now-trendy industrial strip in Berkeley. Cody's architecturally stunning second bookstore is just a few doors away. PGI's interior is handsomely austere, with leather couches atop cement floors and lots of contemporary art on the walls. The sun-drenched offices are arranged around two courtyards, which come in handy for the frequent company parties.
Charlie Winton's office is off to one corner and is no bigger than any of the others. With rock 'n' roll prints still leaning against the walls waiting to be hung, it looks as if he just moved in, although the headquarters opened more than a year ago. Winton always likes to talk about what books are shipping well, but he made time to show off two of his guitars: a '69 Les Paul and an even older Fender Stratocaster.
He might lament the bygone days when jam sessions were a regular happening during the work day, but Winton seems resigned to and even pleased with the level of professionalism his company in particular and the book industry in general has developed over the past decade.
Of course what really sent PGW over the top in terms of sales was the huge and largely unpredicted success of Grove's Cold Mountain by Charles Frazier in 1997. It pushed the company over the $100 million mark, where it aims to stay.
All of the strategic plans of the past few years, from the new distribution center to the publishing acquisitions, have been about making the company more efficient in every area. When Winton talks about the future of PGI he uses words like "organic growth" and "balance."
On the publishing side, that means an effort to balance the reference-to-trade title ratio on the lists, with most of the trade publishing coming out of the New York office and the travel and reference books from Berkeley.
"We're not trying to re-create Knopf," Winton said, referring to the goal to publish more original fiction by Carroll & Graf. "We're an independent publisher, but we have a little more resources and can now be more aggressive with advances and things like that."
With the acquisition of John Muir, which Winton said he expects to be fully integrated by March, Avalon fattened its travel publishing list considerably. And since travel and reference materials are proving to have the most electronic possibilities, Winton said Avalon Travel is ready to move ahead with new projects that have digital or on-demand options.
"The main thrust of the near-term will be to leverage the brands of Avalon," said Winton, "and to re-purpose information into more adaptable formats and then be ready to march into the new world, whatever that is."
For now, Winton said, PGI will take a pause and concentrate on operating the companies it has. But he didn't rule out the possibility of future investments.
"We're not a billion-dollar company, but we felt we had to push real hard to maintain our position and become more diversified," said Winton. "We couldn't sit back and be an old company as the world, in terms of customers, competition and the marketplace of publishing and how information is processed, is all moving in an incredibly dynamic way."
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