The steady erosion of book sales is impacting all parts of publishing as the Covid-19 pandemic tightens its grip on the U.S.
At the top of the industry supply chain, Macmillan Publishers became the first of the Big Five trade publishers to publicly disclose the cost-saving actions it has taken in response to the anticipated impact of Covid-19 on business. Explaining that its actions were part of a cost-saving initiative of parent company Holtzbrinck, Macmillan began job cuts April 2 and instituted a hiring freeze. In addition, the company began a temporary reduction in pay for employees, which it anticipates will last from April through June. The pay cuts are structured according to salary level, Macmillan said. Employees at the lower end of the pay scale remain unaffected, while the reduction increases to 20% and 33% as salary increases, with pay of the most senior executives reduced by 50% for the three months.
Barnes & Noble also took action last week to cut costs as business declined. The number of outlets temporarily closed by B&N increased from 400 to more than 500 stores last week, and the company furloughed what a spokesperson called “a large number” of employees at its headquarters. The furloughs occurred across all departments, the spokesperson explained, “with the aim to maintain all functions but at a much reduced level.” In the 100 or so stores that remain open, B&N is limiting the number of customers to no more than 10 at one time. In places where it legally can, B&N is continuing to offer curbside pickup.
Half Price Books, which closed all of its 126 stores two weeks ago, laid off or furloughed 2,146 people, representing 78% of its workforce of 2,752. “This is a very hard day in the history of Half Price Books,” said Kathy Doyle Thomas, chief strategy officer at Half Price. “But we know we will come back. We just don’t know exactly when.”
In Canada, Indigo closed all of its 199 retail locations and laid off 5,200 of its 7,000 employees. Indigo is continuing to operate its online business. Indigo CEO Heather Reisman said she anticipates stores may be closed for as long as 10 weeks. When the stores reopen, Indigo plans to rehire as many laid-off employees as possible, a spokesperson said.
The store closings and layoffs came against a backdrop of declining unit sales of print books. According to NPD BookScan, print units fell 9.2% in the week ended March 28 compared to the previous week. Of the four major categories, only juvenile fiction had an increase over the week ended March 21, with units up 13%. Within the category, the holiday/festival/religion segment had the biggest gain, with a 46.8% jump in sales over the previous week.
After a 66% gain in the juvenile nonfiction category in the week ended March 21 over the week ended March 14, units fell 6%. The strongest-selling segment was holiday/festival/religion, where units increased 34.3%. The big sales winners in the week ended March 21—education/reference/language and games/activities/hobbies—had sales declines in the most recent week of 28.3% and 1%, respectively.
Sales in adult fiction were down in every genre in the most recent week, and units declined a total of 21%. Unit sales were also down in all nonfiction categories, and down 13% overall. The home and gardening segment had the smallest decline, 2.9%.
Adding to publishers’ headaches was the surprise decision made by the printer Quad in the last week of March to close its book printing facilities, an action that sent publishers scrambling to find a replacement. Last fall, Quad put its book plants up for sale, but it has not attracted a buyer. The closure comes at a time when publishers are concerned about the loss of printing capacity due to the coronavirus outbreak.
There was some good news last week. A surge in online sales at Powell’s Books, which comprises five bookstores in Portland, Ore., allowed the bookseller to rehire 49 of the more than 340 staff it had laid off earlier in March.
In an effort to aid all booksellers, James Patterson announced last week he is spearheading a group that includes actor Reese Witherspoon and Reese’s Book Club, the Book Industry Charitable Foundation, and the American Booksellers Association whose aim is to raise millions of dollars to help save independent bookstores from closing permanently due to the pandemic.
A growing number of booksellers are turning to GoFundMe campaigns in order to keep their stores afloat until business improves. Among the booksellers using GoFundMe is 2019 PW Bookstore of the Year winner Literati Books in Ann Arbor, Mich. Mike Gustafson, who owns the store with his wife, Hilary Gustafson, wrote that even with the couple’s emergency savings, which they will dip into if necessary, Literati is “running out of cash to pay our rent, utilities, payroll, liabilities, and publishers, and make sure we have enough cash on-hand to re-open once we make it through.” He added that the store’s business plan is based around in-store purchasing and events—revenue streams that are gone. Gustafson’s words resonated: Literati met its $100,000 goal within 48 hours.
A week in the coronavirus world would not be complete without the announcement of the cancellation of an important industry event. The most recent was the ABA’s decision to cancel its Children’s Institute set for late June at the Weston La Paloma Resort & Spa in Tucson, Ariz. The event has been rescheduled for June 16–18, 2021, at the same venue.