Industry insiders liken the Canadian events of 2002 to a sudden, devastating firestorm. The collapse and bankruptcy of publishing house Stoddart, along with its General Publishing Co. and Distribution Services, left publishers and authors holding an empty bag of revenues and royalties. For much of the summer, inventory was locked in a warehouse while a court defined the terms, and when it was over, not much was left for either side. While the big houses like Penguin, HarperCollins and Random House barely felt the aftereffects, the independents scrambled to find titles, and small publishers learned a tough lesson about the difference between debtor/creditor and trustee/beneficiary distributor relationships.
"When GDS went bankrupt, we lost a truckload of money," Coach House Press managing editor Alana Wilcox said. In order to survive, the publisher assumed its own distribution over the summer. Amid the shipping chaos, Wilcox said it was an opportunity to re-establish good relationships with independent booksellers. "It was financially painful, but ultimately we have just decided to plough ahead," she said, adding, "the only way to make money is to sell books: you don't sell books if you don't make books."
Coach House is only one of a number of publishers that got creative last year. As a member of the Literary Press Group (an association of 43 Canadian-owned publishers that includes Brick Books, Cormorant Press and ECW Press), Coach House was already represented by LPG's sales force. In the fall, a new initiative created an LPG distribution arm, and the Literary Press Group Distribution Collective was born. The collective (or L-Disco, as it is affectionately known) contracts out to an existing supply chain operation for actual order fulfillment, but decides on the discount schedule, freight and returns policies by committee in-house. Aside from being an important symbolic and financial act of reclaiming power, the group shipped a large number of orders in the fall and continues to ship well.
Independent bookstores also felt the backdraft of the post-GDS inferno. "Last year was rather a large hiccup," said Chris Hall, inventory manager at McNally Robinson, Canada's largest independent bookseller with four large-format stores in Winnipeg, Saskatoon and Calgary. "We ran into problems with individual titles more than anything, but it hasn't really affected overall numbers," he added. At first, the chain sourced titles unavailable in Canada because they were represented by GDS directly from the U.K. and U.S. But increasingly, those titles are popping up with other distributors. "For the most part I wouldn't call it a smooth transition, though it wasn't terribly bad. I think we had more of a problem with the Stoddart line, customers coming in for Stoddart books that were no longer available, or those they were distributing."
Hall concedes that although business has resumed as usual for the company, GDS was definitely fulfilling a need within Canadian publishing: to consolidate a number of small publishers for booksellers. "It sure made ordering easy," he admitted. "Now that it is fragmented, and some small publishers are going it alone, we have difficulty making minimums and shipping charges. It makes it more difficult to represent all their titles [and] in some cases literally impossible to stock. You can't cover margins ordering one book at a time." Distribution collectives like L-Disco hope to fill that gap eventually.
Another significant element in the picture is the role of the country's largest bookseller. Two years after the merger of the Chapters/Indigo bookstore chains under Heather Reisman, the new Indigo wields significant buying power. Stocking just one copy of a title in each of its stores can mean half a print run for a micro-publisher, but the mega-chain is in many cases not the largest customer of small press books. "But as Canada's largest retailer, Indigo has a role to play," insists David Caron, executive director of LPG. "There is a lot of room for sales growth there; it's possible to sell more Canadian titles, and I think that they are working toward that." The surviving small publishers are guardedly optimistic that the unwieldy behemoth will rise to the occasion. For the industry to rebound and perhaps even thrive, Indigo will have to live up to its commitment to Canadian content. And that may mean tweaking the existing business model and using its expensive real estate to sell more Canadian books and fewer yoga mats.