Harlequin, a publisher of books for women, is owned by the Torstar Corporation, a media and publishing company. Harlequin comprises several imprints including Harlequin, Harlequin MIRA, Harlequin HQN, Harlequin LUNA, Harlequin Nonfiction, Harlequin TEEN, Harlequin Kimani Press and Carina Press. Publishing operations are divided in two divisions: North America and Overseas. In 2011, Harlequin published books in 31 languages in 110 international markets.
Key Company Developments in 2012 & 2013
“2012 was a year for consolidation and integration at Torstar”, said John A. Honderich, Chair of the Board Torstar. "[Harlequin] remained at the forefront of the digital transformation as romance readers enthusiastically adopted e-book reading. Its single copy titles continue to flourish.” The decline in corporate revenues from last year’s 1.55 billion CAD to 1.49 billion CAD reflects the “challenging conditions in the newspaper industry during the year, a rapidly changing book publishing environment and continued soft economic conditions”, according to Torstar CEO David Holland.
Harlequin reported EBITDA worth 77 million CAD, down 9 million CAD including the decline of 2 million CAD from the impact of foreign exchange. Revenue was down 6% to 426 million CAD, excluding the impact of foreign exchange, due to slow growth in digital sales. Torstar’s net borrowings went down slightly to 149 million CAD.
While digital growth slowed, Torstar said that declines in print sales also began to slow in the second quarter of the year in North America, a “trend that continued for the balance of the year.”
Ownership, Mergers & Acquisition, Internal Organization:
Harlequin announced in December 2012 that it will partner with Cosmopolitan magazine for a new e-book series. Since May 2013, Harlequin has published two original Cosmo Red Hot Reads editions each month.
In 2012, 5% of Harlequin’s revenues were derived from Canada, 48% from the U.S., and 47% from all other markets (the largest of which were Japan, Germany, the U.K., Australia, Scandinavia, and France). Overseas revenues were down 5.3 million CAD due to a negative impact of economic conditions in Europe. Retail print and direct-to-consumer revenue declines more than offset digital revenue growth.
Global digital revenues were 20.7% of total revenue in 2012, up from 15.5% in 2011. In the U.S. market, over 80% of Harlequin’s 2012 digital sales were with two online retailers. As Harlequin has been digitizing its backlist for a number of years, the publisher now has more than 18,000 digital titles available for sale in North America.
Harlequin expands its digital-only Carina Press imprint in the UK, seeking authors from the UK and Ireland as well as from markets such as India and South Africa.
Bestselling Authors & Titles:
In 2012, 49 titles made it on The New York Times bestseller lists.
While Torstar closed fiscal 2011 with revenue growth, Harlequin recorded slight declines both in revenues and earnings. The Book Publishing unit showed mixed result. Publishing revenues fell $5.1 million in 2011, as digital growth could not balance declines in print and overseas. Overseas sales were down $6.5 million, due to a weak European economy. In contrast to North America, where revenue grew $1.4 million. EBITDA for the Book Publishing Segment was down $2.0 million including a decline of $6.4 million from the impact of foreign exchange and a $0.7 million benefit from acquisitions. All other figures exclude the impact of foreign exchange and acquisitions.
Harlequin’s international operations provide Torstar with approximately 28% of its operating revenues.
Digital revenues were up $29.5 million reflecting the continued growth of the digital book market. Sales of print books declined during the year. Higher digital revenues, primarily in the U.K. and Japan, were not sufficient to offset lower revenues in the retail print and the direct-to-consumer businesses. Global digital revenues were 15.5% of total revenue in 2011, up from 7.7% in 2010.
Two years ago, the company expanded international operations by acquiring full ownership of Cora Verlag from Axel Springer, Harlequin's joint venture partner in the country since 1976.
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