With revenue above $182 million in 2015, the Quarto Group occupies a rare spot in today’s increasingly consolidated publishing world: a publicly traded independent company with size and scale. In fact, Quarto CEO Marcus Leaver said the company views itself as having “the might of a major, and the creativity of an independent.”
Since it was founded in London in 1976 by Laurence Orbach, Bob Morley, and Michael Jackson, Quarto has specialized in illustrated books. Quarto’s early focus was on the publication of international coeditions, as the cofounders sought out overseas partners to reduce the costs associated with publishing illustrated editions. Though coeditions remain an important part of its business—they accounted for 27% of revenue in 2015—the company has devoted more resources to publishing its own titles. Through a series of acquisitions, which included Creative Publishing, Motorbooks International, and Cool Springs Press, Quarto has built a $72 million American publishing business that caters to enthusiasts in categories that range from art instruction to motor sports.
Quarto’s acquisitions have not been not confined to the U.S.; it has bought niche companies in the U.K. as well, including Ivy Press, which it acquired in 2015. The various acquisitions sometimes created confusion for its accounts, so last year Quarto undertook a branding campaign to highlight the Quarto name, while still singling out its different imprints. In creating the Quarto Publishing Group USA, which is composed of 16 imprints, Leaver said, “We wanted to show the breadth of what we do.”
All of those imprints, Leaver stressed, focus their editorial efforts on particular areas without interference from headquarters. Editorial freedom forms the “creative essence” of Quarto that had been at the core of Orbach’s original vision for the company. Leaver, who succeeded Orbach in 2012 after a group of shareholders called for Orbach to be replaced, does not minimize Orbach’s pivotal role in growing Quarto. Orbach “is the most important person in the company’s history so far,” Leaver said. “He created the company’s ethos, and I consider him a mentor.”
Still, Quarto’s shareholders brought Leaver in to make certain changes. Among his priorities was to create a more efficient global operating structure, and Leaver believes he has largely succeeded. Quarto now has a global sales and marketing platform that sells its books in 45 countries and in 35 languages. And Quarto’s employees realize they are part of a global company, whereas previously the different parts of the company “were not always on the same page,” said Leaver, who credits the Quarto staff with buying into the new strategy.
One of the accomplishments Leaver is most proud of is continuing to reduce Quarto’s debt while investing in the development of new intellectual property. In 2015 Quarto’s debt was cut 10%, but it still invested more than $30 million to create new content.
Leaver has also looked to fill holes in Quarto’s portfolio, and nowhere has the company seen better results than in the children’s market. Since 2012, sales in the children’s group have increased 75%, and the $32.2 million the division generated last year represented 22% of all Quarto revenue.
Leaver sees plenty of opportunity to expand in the future and makes clear that niche acquisitions will continue to play a part in Quarto’s growth. To that end, it acquired Harvard Common Press in February. HCP was particularly attractive to Quarto because, among its other assets, the company has 25,000 cooking recipes. Leaver said those recipes will fit well with the QuartoKnows website, which the company launched last year to showcase and promote what it publishes to consumers. In 2016, Quarto will focus on making QuartoKnows more of an e-commerce platform.
In addition to showing what it does well, Quarto’s 40-year history has also taught it what areas to stay away from. “We won’t be publishing fiction,” Leaver said, “or anything in black and white. We do illustrated books really well, so that is what we are going to focus on.”
Quarto Group Operating Divisions
($ in millions)
|Quarto International Co-editions||$42.7||$50.1||17.3%|
|Quarto Publishing Group USA||$64.0||$72.4||13.1%|
|Quarto Publishing Group UK||$21.4||$22.8||6.5%|
|Books & Gifts||$29.9||$22.1||-26.1%|
|Quarto Hong Kong||$13.3||$14.8||11.2%|