The decision to focus its 2020 list on books that could perform well online, in nontraditional outlets, and in digital formats improved profits at Quarto in 2020 compared to 2019 while still contributing to a decline in sales. Operating profit in the year rose 6%, to $9.3 million, while revenue declined 7%, to $126.9 million. In addition to a change in product mix, cost cuts added to the profit improvement, the publisher said.
Although sales to the U.S. fell 11.7% last year, America remained Quarto largest market by far with, sales of $63.1 million in 2020. This Book is Anti-Racist was a bestseller, generating revenue of $1.2 million. The top sellers in the U.S. last year were Beautiful Boards and Modern Sourdough. Throughout its English-language markets, which includes the U.K. and Australia/New Zealand, Quarto said its imprints were able to take advantage of the popularity of hobbies during Covid-imposed lockdowns, and it will continue to focus on subjects such as gardening, cooking, craft, and self-help.
Quarto also outlined a number of new initiatives for 2021 as it drives to become “a significant trade publisher in North America, the U.K., and Australia and New Zealand.” The company will continue operating it coeditions business as well, Quarto said, although trade publishing is expected to become a larger share of its overall revenue.
In the U.S., Becker & Mayer has begun to publish its own titles rather than relying on licensing, while the Smart Lab unit, home to the bestselling Squishy Human Body kit (which has sold more than 200,000 copies worldwide) will introduce a number of new products this year.
Quarto is also relaunching the adult list of Aurum, its U.K.-based nonfiction imprint, which will broaden its catalog beyond purely illustrated books to include a new list of narrative, non-illustrated nonfiction books. The switch, Quarto said, “will also provide the opportunity to increase Quarto's e-book offering, as well as the impetus to launch audiobooks in 2021” in the U.K.
Quarto said its push to expand its trade business will include “bolt-on” acquisitions in the areas of “cookery, home and garden, art and craft, heritage, children's, and well-being.”
A longstanding objective of Quarto has been to reduce debt, and debt was cut to $19.7 million last year, from $50.5 million in 2019. In February, Quarto raised $18 million by issuing new shares, and sold a 20% stake in the company to Italian publisher Giunti Group.
Though Quarto was optimistic about prospects for 2021, it did strike a note of caution—the cost of books being shipped from Asia. “The disruption of freight shipping has led to shipment delays and 300% increase in shipping costs,” Quarto said. To counter further disruptions, Quarto said it will "work closely with our logistics suppliers and network of onshore and offshore printers.”