In a surprising development in the direct market comics shop channel, DC is ending its 25-year relationship with Diamond Comic Distributors, the dominant distributor of comics periodicals in North America. Beginning June 8, comics shop retailers must order comics periodicals and graphic novels from Lunar Distribution or from UCS Comic Book Distributors; book trade retailers can continue to order DC graphic novels from Penguin Random House Publisher Services.
In a note sent to comic shop retailers on June 5, DC said the move was driven by both the pandemic and the end of its contract with Diamond. “DC has been analyzing its direct market distribution for some time, long before Covid, specifically in light of sustained stagnant market growth. The timing of the decision to move on from Diamond was ultimately dictated by the fact that DC's contract with Diamond has expired, but incidentally, the disruption by Covid to the market has required DC to forge ahead with its larger growth strategies that will benefit both the Direct Market and DC.”
The move has rattled direct market retailers and comes at a time when Diamond Comic Distributors (and Diamond Book Distributors, which distributes to the book trade) resumed shipments of books and periodicals to comics shops May 20 after a 7-week shutdown due to the coronavirus pandemic and lockdowns. Diamond Comic Distributors is the dominant distributor of comics to the comics shop market in North America—a network of about 2,000 comics shops that buy their inventory nonreturnable at wholesale from Diamond—a market that is also dominated by two publishers: Marvel and DC.
DC’s June 5 letter goes on to state: “We recognize that, to many of you, this may seem like a momentous decision. However, we can assure you that this change in DC's distribution plans has not been made lightly and follows a long period of thought and consideration. The change of direction is in line with DC's overall strategic vision intended to improve the health of, and strengthen, the Direct Market as well as grow the number of fans who read comics worldwide. We believe this new distribution system will bring you world class service using top of the line and modern systems that will provide you the most efficient operational supply chain.”
The DC note points retailers to the websites of Lunar Distribution and UCS Comic Book Distributors, two mail order retailers that were drafted by DC to add wholesale distribution to their services after Diamond halted shipments to comics shops in April. At that time there was much speculation in the comics shop market about whether these newly organized distributors would continue after Diamond came back. Now it appears that they were intended to replace Diamond altogether.
In response to DC’s move, Steve Geppi, founder of Diamond Comic Distributors and its parent Geppi Family Enterprises, issued a statement. Geppi said that after a series of exchanges with DC about extending its distribution agreement that began in April, Diamond also received DC's termination notice on June 5.
“While we had anticipated this as a possible outcome, we, like so many others in the industry, are disappointed by their decision to end our partnership so abruptly at this time,” Geppi said. But Geppi added, “although we had hoped to reach an agreement with DC, every great change also presents great opportunity! Rest assured, Diamond is a strong company and our success does not depend on the actions of one business partner. While we recognize this change impacts the industry, we are well-positioned to seize growth opportunities and are committed to the success of our publishing partners, the Direct Market and our industry as a whole.”