Findng a niche has always been considered the key for an independent publisher to be successful. And while that principle applies to several among this year's crop of fast-growing small publishers, others have embraced diversification, albeit in a measured fashion, as a means to survive and thrive in today's publishing marketplace.

Gibbs Smith, Publisher, for example, has long operated textbook and trade divisions, and that strategy has helped the publisher sustain double-digit company growth for more than four years. While the textbook division, the smaller of the two groups, provided the largest gains in 2001 and 2002, it was the trade division that carried Gibbs Smith in 2003. Sales in the text unit fell 18% last year, but that was more than offset by a 41% increase in the trade group. "The textbook market gets more challenging every year, but we are still committed to growing the division," says general manager Christopher Robbins, noting that the dual-market publishing approach has allowed the company to grow organically for nearly a decade.

Red Wheel/Weiser president Michael Kerber credits part of his company's success to operating three distinct imprints: Weiser Books, Red Wheel and Conari Press. While the company's core audience remains New Age, the launch of Red Wheel in 2001 and the purchase of Conari in 2002 broadened the appeal of Red Wheel's list to a more mainstream audience. The balance between New Age and such trade areas as women's and self-help, says Kerber, helped Red Wheel weather a slow start in 2003 and let the company finish the year with growth of 16%.

Ronnie Sellers, head of Ronnie Sellers Productions, is using expansion into books to diversify his company, which had focused on calendars. The company published 123 calendars in 2003 and plans to release 134 in 2004, but Sellers believes his company is close to reaching saturation point in the calendar segment. Sellers published two books in 2001 and quickly ramped up its production to 40 last year; this year, it plans to do 24 to 36 books. "Our emphasis is on growing the book line," Sellers says. Some of these books are derived from popular calendars, like the recently released Cat Naps: The Key to Contentment, which was a huge hit as a calendar.

Sellers, who had been co-owner of Renaissance Greeting Cards, which entered the calendar business with Sellers's own Cat Codependents, founded his own company in 1993. Sellers says he always intended to become a book publisher, but knew from his experience that it would be easier to sell directly to bookstores as a calendar publisher rather than as a small book publisher. The strategy worked; he became a vendor of record at Waldenbooks in his first year in business and, after a couple of years, was selling directly to Barnes & Noble.

Byron Preiss's ibooks operation has always published in a number of different areas since its launch in 1999. Science fiction/fantasy, mystery and military history are among the segments where ibooks has a presence. Ibooks also offers titles in a range of formats—hardcover, trade paperback, mass market paperback, e-books and, in 2003, graphic novels.

Barefoot Books remains focused on publishing illustrated children's books, but it is broadening its business by entering into direct selling. The company launched the direct-sales effort in November and has signed 45 home sales representatives to date. Barefoot hopes to have from 200 to 250 reps (called stallholders) by the end of the year, says president Nancy Traversy. Traversy says she decided to establish a direct-selling organization because "as a small publisher, it can be challenging to reach our audience through traditional trade channels." The direct group brings Barefoot's titles directly to the publisher's core customer group, which Traversy defines as "parents who take an active interest in their children's education." Traversy is quick to emphasize, however, that the direct-selling program is intended as a complement to its retail sales efforts, not as a replacement.

Barefoot has already seen the benefits of selling through a wide range of channels. Its sales now are divided equally between the trade and the library/school market. In 2003, despite a weak library market, Barefoot's sales to libraries rose 40%, and the company's educational catalogue did very well, says Traversy. But Barefoot is not stretching its marketing dollars too thin. The company has no plans to enter the mass merchandise market or to get involved with publishing licensed books.

With only nine companies, this year's list of fast-growing small publishers is the shortest in the 10 years PW has run this feature. It's hard to pinpoint the reason why so few companies qualified for the list this year. The soft economy could have limited sales gains last year. And there may be fewer companies that fall in the $2-million to $10-million sales range. PW received many submissions from publishers with sales under the $2-million level, while a number of companies that have appeared on the list in the past have grown beyond the $10-million limit. Indeed, one company on this year's list just topped $10 million in sales in 2003, while two others are pressing against that figure and could hit it in 2004. The head of one company suggested that while "mid-sized small companies" are not quite large enough to benefit from the economies of scale of larger companies, they are big enough to need to invest more resources in an infrastructure that smaller companies don't require, putting these publishers in a financial bind.

Whatever the problems may be for these publishers, the companies on this year's list were still able to register a 41% sales increase between 2001 and 2003, with total sales of approximately $52.5 million. And most of these publishers were optimistic about prospects for 2004, citing an improving economy and improvement in their own publishing programs as reasons for the bright outlook.

The Standouts

The highlights for ibooks in 2003 were the introduction of two brands— Fighting Fantasy, role-playing books published under license from the U.K., and Poison Pen Press, mass market reprints of titles released in hardcover by the mystery publisher and independent bookseller Poison Pen. The addition of the new brands contributed to an increase in title output to 180 titles last year, up from 115 in 2002. Ibooks publishes eight to 12 hardcovers annually, and its paperback list is divided equally between trade and mass market. About 50% of the company's titles are available as e-books, and Preiss says sales in that format are becoming significant. Palm Digital is the most popular e-book format; in December, Palm downloads generated sales of $7,000 for ibooks. Last year also marked the launch of ibooks' first graphic novels; led by Yossel, the format accounted for more than 10% of gross sales in 2003. Expansion in 2004 will include more graphic novels, additions to its military history mass market line and the introduction of Law & Order: Dead Line, the first of what Preiss hopes will be an ongoing series based on the television drama. Ibooks' most ambitious venture, however, is the introduction of its first children's picture book line, Milk and Cookies Press. Five books are set for release in September. The company has also brought on some new talent in 2004; Michelle Lewy, formerly in sales at Scholastic, will do consulting for marketing and sales.

With its trade division leading the way, Gibbs Smith, Publisher, had an 18% increase in sales in 2003, following a 29% gain in 2002. The trade unit was led by two series that broke through in 2002—the 101 series and another devoted to French decorating. 101 Things to Do with a Cake Mix sold 80,000 copies in 2002 and continued to do well again last year, while 101 Things to Do with a Slow Cooker sold more than 100,000 copies in 2003. Unmistakably French and Charles Faudree's French Country Signature were the top sellers in the French decorating line. The Integrity Advantage sold well in the business category, and a follow-up, Leading with Integrity, is planned for 2005. All of Gibbs's titles benefited from better marketing and better relationship with store buyers, general manager Robbins says, which contributed to better sell-through and a 6% decline in returns. Robbins attributed the decline in the company's history textbook line to tight state budgets and to the No Child Left Behind Act, which drew money away from history materials in favor of reading and math. Despite the slump, Gibbs will add four states to its core state social studies program, bring the list to 22 states. In trade, three more titles are set for the 101 series and the company is aggressively strengthening its cookbook line.

Operating for the first full year under its new name, America's Test Kitchen, the company formerly known as Boston Common Press/Cook's Illustrated had another year of solid sales gains in 2003. Sales were strong in both of ATK's two major lines—The Best Recipe and the companion books that are done in connection to ATK's television show on PBS. Three new Best Recipe titles were published last year, while the compilation books sold more than 129,000 copies. In addition to sales through retailers, ATK used its connection to Cook's Illustrated magazine to increase its sales through direct-response channels to 398,000 units, up from 318,000 in 2002. ATK one-off titles, The Kitchen Detective and The Best Kitchen Quick Tips, sold 24,000 copies and 44,000 copies, respectively. ATK, which was founded by Christopher Kimball, signaled its intention to grow its book operations last fall with the appointment of Elizabeth Carduff, formerly associate publisher of Perseus Books, as editorial manager. Projects for 2004 include three new titles in the Best Recipe series, led by Baking Illustrated, which will have a 150,000-copy first printing. A new line of short trade paperbacks, Pocket Chef, is set for release in the fall.

With his background in greeting cards and calendars, Ronnie Sellers is focusing Ronnie Sellers Productions' book line on "graphically strong titles," Sellers says. To that end, Sellers has signed Mike Dowdall and Pat Welch, the creative team that did Humans, the parody of Gnomes, to create Coots and Biddys. Sellers plans to publish Coots and Biddys as books, calendars and greeting cards. In 2003, the company's Cat Naps book sold out its 10,000-copy printing and Sellers has done a 10,000-copy second printing. Everything a Girl Needs to Know About Her Period also did well last year, as did The Unofficial Office Pool Handbook. The first titles in a new series, Doggie Days Love Guides (written from a canine perspective), were released last year and at least six more are set for 2004. Sellers's market focus is on bookstores and gift and stationery stores.

Barefoot Books managed to boost sales 45% between 2001 and 2003 despite moving offices, overhauling the staff and switching to a new distributor, Baker & Taylor Distribution Solutions. "We're in a great position" for strong growth in 2004, says Barefoot's Traversy, noting that January was one of the best months in the company's history. We All Went on Safari was one of Barefoot's top titles last year, selling 20,000 copies. Animal Boogie, packaged with a CD, was another popular seller. For 2004, Traversy has high expectations for My Daddy Is a Pretzel and TheBarefoot Book of Stories from the Ballet. The company is also doing more partnering, entering int0 agreements that will have its artwork appear on different products. Traversy is also excited by Barefoot's move to B&T, noting that B&T is familiar with all of the publisher's marketing outlets—retailers, libraries and consumers.

The majority of New Press's gains came in 2003, a "banner year" for the company, says Ellen Adler, who joined the not-for-profit publisher last fall as deputy director. One reason for the strong year, Adler says, is the political climate, noting that many of New Press's books "address some of the profound concerns that Americans have about current domestic and international policies." Those concerns translated into a good reception for such frontlist titles as After the New Economy, The Betrayal of Work and The Pinochet File. White House Tapes, a $75 book/CD package, didn't do as well as expected, but Adler believes it will be a strong backlist title. Sales were also given a boost by Studs Terkel's Hope Dies Last and Will the Circle Be Unbroken?; the reissue of Noam Chomsky's early work; and several European fiction writers, such as Henning Mankell and Jean Echenoz. New Press did well in both the trade and education markets last year, Adler says, and the publisher continues to explore ways to reach beyond the traditional book market. A criminal justice outreach program, for example, generated attention for Invisible Punishment and Lost Liberties. Adler expects New Press will have another good year in 2004, led by Moyers on America and Citizen You!, a satire by Onion editors Joe Garden and Mike Loew and movie producer Randy Ostrow.

A more diverse list and more outlets were the keys to growth at Red Wheel/ Weiser last year, says company president Michael Kerber. The company added more than 750 accounts in 2003, from Ducky's Car Wash to Ricky's Urban Outpost, while also increasing its focus on independent stores by participating in Book Sense's "White Box" mailing promotion. Books that did well last year included Crones Don't Whine, Retail Therapy and Everything I Need to Know I Learned from Other Women. Kerber is very excited about prospects for 2004. Having made it through a difficult 2003, Kerber believes Red Wheel "has a great foundation on which to build." Part of that expansion includes acquisitions. Kerber says he is looking for companies that publish in Red Wheel's core areas, noting that the "ideal acquisition" would be of a publisher that could benefit from Red Wheel's distribution system. Internal expansion will include Red Wheel's entry into the card deck business with the release of the Everyday Creative series. Among the titles Kerber thinks will do well in 2004 are Loving Yourself, Dream Big, Fifty Ways to Feed Your Soul and What Is Goth. The company also has two Da Vinci Code—related books, Templars in America and The Golden Builders.

More interest from mainstream readers was cited as a key factor behind the sales gain at Inner Traditions/Bear & Co. over the last two years, reports publicist Bill Pfau. Sales went up at Amazon, Barnes & Noble (both by 25%) and Borders (11%). Inner Traditions was another company that benefited from the popularity of TheDa Vinci Code. The Woman with the Alabaster Jar, first released in 1993 and mentioned in Da Vinci, had "spectacular sales" in the year, notes Pfau. The company's other titles on the Knights Templar also got a solid sales bounce in the year thanks to Da Vinci, Pfau says, adding that the categories of ancient mystery and spirituality remain "hot topics." The increased interest in those areas has drawn more media interest in IT's authors from major outlets (Good Morning America, ABC News, Time and Newsweek), in turn fueling higher sales. The company also improved its back-office operations last year, helping to lower the return rate from 13% in 2002 to 11.8% in 2003.

Growth at Island Press has come from expanding beyond its core readership of environmental professionals and shifting its publishing emphasis from literary nonfiction to trends and issues, says publisher Dan Sayre. Trade sales now account for about one-third of total revenue, and academic sales generate from 5% to 10% of revenue. Island's trade imprint, Shearwater Books, publishes eight to 10 titles per year and sold almost 10,000 copies each of The Empty Ocean and Six Modern Plagues in 2003. To feed the academic and professional markets, Island has just published The Conservation Directory, 2004, which the company publishes in cooperation with the National Wildlife Foundation. Another positive has been the move to do its own distribution in cooperation with the University of California Press and Princeton University Press. Sayre hopes the election year will give greater exposure to environmental issues, calling the Bush administration "the worst administration for the environment in a century." One new title that has caught some buzz is The Hype About Hydrogen, which refutes arguments about the benefits of hydrogen-fueled cars, which had a first printing of about 7,500.

PW's Small Publisher Standouts

Publisher Sales Growth 2001—2003 Titles 2001 Titles 2003 Employees 2001 Employees 2003
ibooks New York, N.Y. 83% 69 180 9 9
Gibbs Smith, Publisher Layton, Utah 52% 45 64 34 41
America's Test Kitchen Brookline Village, Mass. 51% 5 7 34 44
Ronnie Sellers Productions Portland, Maine 46% 2 40 12 22
Barefoot Books Cambridge, Mass. 45% 70 68 28 24
New Press New York, NY 29% 51 69 18 20
Red Wheel/Weiser Boston, Mass. 28% 52 64 16 20
Inner Traditions, Bear & Co. Rochester, VT. 28% 62 66 32 34
Island Press Washington, D.C. 12% 37 41 32 32

McBooks Stronger After Near-Death ExperienceIt's tough for any independent publisher to build a business these days. But McBooks Press, a small publisher specializing in nautical historical fiction, faced an unexpected challenge early on that could have wiped out the company—a huge chunk of its inventory and the cash it needed to keep operating were suddenly out of reach when its distributor, LPC Group, filed for bankruptcy.
"We lost about $330,000, which to a six-person publisher is obviously an enormous hit," explains Alexander Skutt, president and publisher of the Ithaca, N.Y., company. At the time of the bankruptcy two years ago, McBooks had a staff of just four people, including Skutt. It was only during the past six months that the employee roster swelled to a half dozen—an indication of the publisher's growth. The company also has upped its output to 24 books a year, twice as many as after the bankruptcy, and has revenue that Skutt describes as in the "low seven figures."
Because of Skutt's resilience and creativity in weathering the bankruptcy, he was presented the first Miriam Bass Award for Creativity in Independent Publishing at last week's Association of American Publishers annual meeting. The award was created in memory of Bass, who died last year, and is co-sponsored by the AAP, Rowman & Littlefield Publishing Group and National Book Network (NBN). It is to be given annually and carries a $5,000 cash prize, funded by RLPG and NBN.
Though Skutt has still recovered less than 10% of the money LPC owed McBooks—and doesn't ever expect to see most of the rest—he and his company have moved on. In addition to the paperback reprints that are the company's main focus, McBooks is publishing some original fiction, including work by Maine writer James L. Nelson, whose next book, The Only Life That Mattered, is on the publisher's fall 2004 list. The book is based on two real-life 18th-century female pirates, Anne Bonny and Mary Read, and their friend Calico Jack. Skutt said he'd like to expand further in that direction. "We're interested in doing historical fiction, not necessarily nautical fiction, with strong women characters," he says. McBooks also does a smattering of regional nonfiction, such as Wine Tour of the Finger Lakes, which is scheduled to be published in June.
Skutt says the company's sales have grown by about 35% annually during the past several years. Though McBooks has officially been in business since 1980, Skutt operated it as a sideline for years while he owned and operated bookstores and video stores. It wasn't until 1995 that he decided to commit himself full-time to publishing. He obtained the rights to out-of-print novels written by the 19th-century British naval hero Capt. Frederick Marryat—a once-revered writer who had been largely forgotten—and switched his focus from vegetarian parenting books to historical nautical fiction.
By early 2002, the company had picked up momentum. It had acquired the reprint rights to a popular nautical fiction series by Dudley Pope and Alexander Kent and had just signed the lease on new office space. Then, in April of that year, Skutt was blindsided by the LPC bankruptcy.
"He was owed more money than he had ever been owed by any distributor in the history of his publishing company, and he could have very easily gone out of business had he not handled this right," says NBN president Jed Lyons. The first right move Skutt made was hiring his own lawyer, who quickly convinced the judge to return to McBooks the books (valued at $200,000) that were sitting in LPC's warehouse. Then—in need of a new distributor—Skutt called NBN. "He was very creative in his approach to dealing with us; he called us and said he was facing this problem and how could we help," Lyons notes. NBN advanced McBooks money against future sales and helped the publisher work out a delayed billing deal with Edwards Brothers printers that enabled it to keep its books in print during the cash-flow crunch.
But the publisher's distributor-related problems weren't quite over. In August of last year, Skutt says, McBooks lost books worth about $32,000 in the NBN warehouse fire. He joked that he was beginning to wonder if he was cursed. Fortunately, this time insurance covered the loss. —Karen Holt