Penquin publishers made good bucks in 2009 due to a surprise vampire bestseller and robust paperback backlist sales from known authors. This is a spot of sunny news in the middle of a publishing-profit drought! Must be good vision and leadership AND a little luck, huh?
Anyway, Matthew Flamm of Crain’s New York Business, reports this publishing-profit oasis this way:
‘The surprise bestseller The Help, Charlaine Harris’ Sookie Stackhouse vampire series and a spike in paperback sales of older titles allowed Penguin Group (USA) to shine as the star performer of parent Penguin Group, which on Monday reported 2009 revenue of more than 1 billion pounds, or about $1.5 billion, up 11% over the prior year.
The parent company’s gains were entirely due to a strong dollar relative to the pound. At constant currency rates, revenue fell by 1%. But sales were still up at the U.S. division over the prior year, according to Penguin USA, making the publisher one of the few American houses to see growth in 2009. A tough environment for retailers that has hit booksellers particularly hard has hurt the publishing industry overall.
Penguin Group, a division of Pearson PLC, does not break out the performance of its units, but it is generally considered that Penguin USA contributes about 60% of revenue.
“If we’d been thinking a year ago about whether we could deliver this kind of performance in 2009, we would have been pretty doubtful about it,” said Penguin Group Chief Executive John Makinson.
The breakout success of Kathryn Stockett’s debut novel The Help, which has 1.7 million copies in print, played a key role. But Mr. Makinson said that overall the division was helped by a wide range of best selling titles, many from well-known authors with proven track records, like Nora Roberts, Michael Pollan and Ms. Harris.
“This was the performance of a business that had thought quite carefully about distribution of risk, and wasn’t dependent on any one big bet,” Mr. Makinson said.
Penguin USA Chief Executive David Shanks also credited sales growth at the children’s division and double-digit growth for paperback sales of titles by brand-name authors like Patricia Cornwall and Ms. Roberts. Those backlist titles performed especially well in the bad economy.
“We felt and went about convincing our accounts that in a bad time, if people had money to spend, they were going to fall back on names they could trust,” Mr. Shanks said.
E-book sales, though still a fraction of the overall business, grew by 300%, year over year. According to Mr. Shanks, those sales also contributed to how well the backlist performed.
“We sold a lot of backlist e-books,” he said. “It wasn’t all New York Times bestsellers.”
Operating profit for Penguin Group fell 10% to 84 million pounds, or $125 million. At constant exchange rates, the decline came to 17%. It was attributed to restructuring costs at Penguin UK and the Dorling Kindersley division.’