Harlequin finished a disappointing 2004 with sales falling 7.9%, to C$538.4 million ($435 million), and operating profit tumbling 21.7%, to C$97.2 million ($78 million). More than 70% of the earnings drop came in the North America retail market, which the company said was due to the general weakness in the U.S. mass market paperback segment. The drop in North America direct-to-consumer earnings was attributed to a decline in new customers.
To help turn business around in 2005, Harlequin is planning its own version of the larger mass market format already adopted by Penguin and Simon & Schuster. The company will launch the Next line in July, increasing the height of the books from 65/8" to 7½". The width will remain the same. Each book will be 304 pages and sell for $5.50. Marleah Stout, senior manager for public relations, said Harlequin will use Next to test the taller mass markets before expanding the format to its other imprints.
Harlequin is also working to increase its sales through its Web site, eHarlequin.com, by double-digit amounts over the next several years, Mark Mailman, executive v-p for direct-to-consumer sales, told PW. Mailman said the company has been "very successful" in driving customers to the site, but less successful in getting them to buy books. To spur sales, Harlequin is revamping the site to make it easier to both find and order books and, effective March 1, it increased the Web discount to 20% from 10%. Also on March 1, the company launched its first online book club, Reader's Ring. The club launched with Me & Emma by Elizabeth Flock and will highlight one book each quarter