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-- 5/29/00

Flat Year for Thomas Nelson | Poor Start for Zany Brainy, Noodle Kidoodle
New Kids E-Book Site to Debut | PEN Winner Disqualified
Mike Winton to Leave PGW | Naggar Rises at Random House
France Edition G s Online | Abbeville Moves Distribution to CDS
Obituary: Harlin Quist


Flat Year for Thomas Nelson
The nearly year-long restructuring of its gift division was the primary factor in Thomas Nelson's lackluster financial performance for the year ended March 31, 2000. Total revenue in the year was $261.8 million, compared to $261.6 million in fiscal 1999, while operating income inched up to $20.7 million from $20.5 million in the previous year. Net income in fiscal 2000 was $9.9 million, compared to $8.9 million in fiscal '99, a figure that includes a restructuring charge of $4.7 million.

Nelson chairman Sam Moore acknowledged that the restructuring of the gift division--which he said represents about one-third of total company revenues--took longer and was more expensive than the company had originally anticipated. He added that recent sales reports indicate the division is "getting back on track." The book unit had some problems of its own last year: higher returns and competitive activity put pressure on product pricing. Moore is confident, however, that the book division will see higher sales and profits in fiscal 2001.

Part of Moore's optimism stems from the three companies that Nelson acquired in the last year, including Rutledge Hill Press, which Nelson bought late in 1999 (News, Jan. 10) and which has already had a positive impact on Nelson's financial results.
--Jim Milliot



Poor Start for Zany Brainy, Noodle Kidoodle
As expected, Zany Brainy and Noodle Kidoodle reported higher losses for the first quarter ended April 29, 2000, than for the comparable period last year. Both companies warned earlier this spring that they expected increased losses in the period due to a severe decline in the sale of Beanie Babies.

The results were particularly bad at Zany Brainy, where the retailer not only saw its loss rise to $5 million from $1.4 million, but also experienced a decline in sales from $40.6 million to $39.4 million. Comparable-store sales were down 22.8%. At Noodle Kidoodle, the net loss increased to $2.5 million from $1.1 million, while sales rose 5.2% to $24.1 million. Comparable-store sales were down 15%.

Keith Spurgeon, chairman and CEO of Zany Brainy, told PW he expects comparisons to improve over the next two quarters, and given a healthy fourth quarter, he predicted that the company will have a profitable year. Stanley Greenman, chairman of Noodle Kidoodle, also said he expects better results in forthcoming quarters. Spurgeon noted that the disappointing first quarter performances will not have any impact on the merger of Zany Brainy and Noodle Kidoodle (News, May 1), which is still set to be completed this summer.
--Jim Milliot



New Kids E-Book Site to Debut
Ibooksinc.com, which began publishing books in print and online simultaneously last fall (News, May 24, 1999), plans to launch a new site for children's e-books this July. According to ibooksinc.com president Byron Preiss, www.ipicturebooks.com will feature e-book editions of picture books for preschool and early elementary age children. Preiss expects to have more than 200 titles in ipicturebooks' library when it debuts this summer and 1,500 titles by the end of the year.

In addition to licensing titles from publishers, Preiss is acquiring rights directly from agents, illustrators and authors and plans to solicit material from unpublished authors as well. The company will also bring back works that have gone out of print. Preiss expects to price the e-books at a 20% discount off the print edition.

Preiss has reached an agreement with Reciprocal to manage ipicturebooks' digital rights and to provide encrypted files. "By having Reciprocal handle the back end, we can concentrate on content," Preiss told PW, adding that he is currently looking for a person to head up the ipicturebooks operation. Titles will be available for the Windows and Macintosh platform using such proprietary technologies as Microsoft Reader and Adobe Acrobat, as well as Reciprocal's own technologies.
--Jim Milliot



PEN Winner Disqualified
PEN, the international writers association, and Amazon.com have been forced to issue regrets and disqualify the initial winner of their first annual short story award.

Meera Nair, an NYU graduate student, was first named the winner of the $10,000 prize on May 15 for her story "Video." But because she had previously published another story in a national journal, the Threepenny Review, which has a circulation of more than 5,000, according to the contest rules she was ineligible. A PEN spokesperson called the snafu a "good-faith misunderstanding" and said Nair would be allowed to keep the $10,000.

The new winner is Marlene Reed Wetzel's "A Map of Tripoli, 1967." Reed is a freelance writer from Montana. Her story will be posted on the Amazon.com Web site and will be published in the Boston Book Review.
--Calvin Reid



Mike Winton to Leave PGW
Mike Winton, chief operating officer at Publishers Group West, has decided to leave the company later this year to pursue other projects.

Winton began working at PGW in 1979, three years after the company was founded. Together with his brother, PGW CEO Charlie Winton, and CFO Randy Fleming, he helped expand PGW from a three-person business to a company with more than 350 employees and annual sales of $120 million.

Winton will stay on to assist in hiring and training a new COO, who will report to Charlie Winton. He will also remain active on the boards of directors of PGW, Publishers Group Incorporated and Avalon Publishing Group.



Naggar Rises at Random House
Random House has promoted David Naggar from vice-president, sales development, to senior vice-president, deputy director of sales.

After four years at Warner Books as an acquiring editor and a member of the marketing and sales team, he joined BDD in 1991 as assistant to the CEO, and later became business manager for the sales division. In 1995, he was named v-p, director of direct response marketing, for Bertelsmann's France Loisirs book club, and three years later became v-p, sales development, at both BDD and Random House. Naggar is the son of agent Jean Naggar.



France Edition G s Online
France Edition, the Paris-based book-promotion agency representing 240 French publishers at international fairs and book shows, has gone online. The site, www.franceedition.org, provides capsule information on publishers, catalogues and rights availability, together with links to the Web sites of individual publishers. Thanks to a password system, individual publishers can revise and update entries as often as they choose. France Edition's president, Liani Levi, who runs her own imprint, points out that the site is designed to promote both foreign rights and export sales. A second site, www.frenchrights.com, serving France Edition's New York affiliate, the French Publishers Agency, will be fully active come summer.
--Herbert R. Lottman



Abbeville Moves Distribution to CDS
The Abbeville Publishing Group is moving its sales, fulfillment and distribution functions to Client Distribution Services, effective July 1. Abbeville had previously handled its own sales and distribution through a combination of in-house reps plus commissioned rep groups. Although Abbeville will no longer work with the commissioned groups, it will retain its in-house marketing unit.

Robert Abrams, president and publisher of Abbeville, said the agreement with CDS will allow the publisher to "devote more time to being creative and innovative publishers," while not having to worry about Abbeville's sales and back-end operations. Under the new agreement, CDS will also assume sales and distribution for Abbeville's European distribution clients, which includes Flammarion, Skira, Edition Stemmle, TCI and Van der Meer.



Obituary: Harlin Quist
Harlin Quist, publisher of Harlin Quist Books, died May 13. He was 69. Quist began as a theatrical producer before turning to publishing; he started his career at Crowell-Collier and then moved to Dell, where he worked on the first paperback picture books. Quist started his line of books in 1967, mostly publishing children's books. For one year he ventured into adult books, for which he won two American Book Awards. Following those awards, Quist left publishing for a time, and became involved in theater and other interests. Last year, Quist revived his imprint--reissuing some of his older children's titles as well as publishing new ones for European distribution--in Paris, where he spent most of his time.
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