Random House reported that profits are down for the first half of 2009, in its results issued this morning. Profits fell 35.5%, to 20 million euros, and worldwide revenue declined 4.2%, to 734 million euros. With revenue sinking largely due to the U.S. division, the publishing unit was boosted by a strong summer but, ultimately, held down by the tumbling economy.
RH chairman and CEO Markus Dohle said in his letter that while both the German and U.K. divisions of the publishing group had a "solid start to their fiscal year," the drop in retail spending meant "we had to fight harder for every sale, as did our competitors." Nonetheless, Dohle said the numbers aren't "all gloom and doom," with sales picking up through June, July and August, noting strong sales from the first two titles in Stieg Larsson's trilogy, Girl with the Dragon Tattoo and The Girl Who Played with Fire; Dohle noted that the latter is the first novel in translation in the last 25 years to hit #1 on the Times bestseller list. Other highlights came from (the U.K. edition of) James Patterson and Maxine Paetro's Swimsuit, Karin Slaughter's Genesis, and a major boost was gotten from the trade paperback of The Guernsey Literary and Potato Peel Pie Society. Other big summer sellers included Olive Kitteridge and, back up on the charts, 2006's The Book Thief.
Although Dohle expressed optimism about the strong fall list, which, among other things, features Dan Brown's The Lost Symbol—going to press in its first run for 6.5 million copies—he said the house faces steep competition and a still-faltering economy. "The competition in the marketplace from non—Random House titles will be more fierce and unrelenting than ever. And the impact of the ongoing recession on potential consumer book buying is still a big concern for all of us," Dohle wrote.
For all of Bertelsmann, revenue fell to 7.2 billion euros from 7.7 billion euros, and, due to a host of one-time items, the company posted a loss of 333 million euros in the first six months. Cost cuts are expected to save 900 million euros annually, the company said. Some of the savings will come from having fewer people; Bertelsmann had 103,452 employees at the end of this June compared to 107,154 at the end of June 2008. The top priority for 2009 is to stabilize Bertelsmann's existing businesses and preserve liquidity, steps, the company said, that will lead to future growth.
