Diamond Book Distributors
There have been some hearty proclamations recently that everything’s coming up Milhouse for the sales end of comics: “the best quarter in a decade” and “everyone up [in sales],” celebrates expert numbers-cruncher John Jackson Miller. ICv2′s recent market white paper concluded they were “bullish on the business.” I’m not denying there have been some encouraging signs. But when a highly acclaimed and savvy publisher like Archaia Entertaiment nearly disintegrates right under our noses because it switched bookstore distributors last year, then clearly not everyone is up. And not everything is quite as rosy as is being suggested.
Comic Book Resources’ recent interview with new Archaia President Jack Cummins should’ve turned more heads. This should have been a cold, hard reminder that small- and even medium-sized publishers frequently dance along a thin line between success and failure.
I spent Wednesday in New York City at BookExpo America, which bills itself as “the largest book industry event in North America.” It took up a good portion of the Javits Center but was weirdly unlike a comic convention: There were panels and celebrity appearances and autographs, and all the publishers had booths, but they weren’t selling books. They had big stacks of one or two that were being given away for free, and everything else was display copies. It’s a very different vibe from a comic con, because the attendees aren’t so much fans as potential customers — retailers and librarians. Also, there were no costumes, although you could get your picture taken with a life-size inflatable Captain Underpants.
Comics were there, of course. Diamond Book Distributors had a booth, and IDW Publishing, Image, and BOOM! Studios were in the same alley, while NBM/Papercutz, Disney/Marvel and Fantagraphics were on other parts of the floor. Most of the big publishers have a graphic novel line as well, so there were some display copies sitting in the booths. And I was there to take part in the Hottest Graphic Novels of 2012 panel, which was well attended and well received.
Publishing | Number-crunching the direct-market charts, John Jackson Miller determines that sales of comics ranking in Diamond’s Top 300 increased by more than 3 million copies in 2011, bringing the total to 72.13 million. Dollar sales, too, rose by nearly $3 million, even as the average price of comic dropped by about a dime, from $3.58 to $3.49. [The Comichron]
Creators | Artist Fiona Staples has responded to Dave Dorman’s objection to her cover for Saga #1, which shows a woman breastfeeding an infant: “I find it a little hard to fathom why anyone would object to a depiction of breastfeeding, even if it were on a kids’ comic, which it isn’t. I have yet to hear a line of reasoning that makes sense to me. That said, anyone who wants to be grossed out by our comic is of course free to do so. I’m just going to fixate on the part where a master painter called me a ‘gifted artist.’” [ComicsAlliance]
BOOM! Studios is now distributing Avatar Press graphic novels to the book trade in North America through their mass-market partners Simon & Schuster and HarperCollins Canada. The agreement began on Monday.
In a press release distributed late last night, BOOM! founder/CEO Ross Richie said the Avatar library complimented BOOM!’s existing line and wouldn’t cannibalize BOOM!’s various imprints. “Avatars’ CEO William Christensen is a brilliant businessman and has a proven track record of great Direct Market success. Avatar has great growth potential in the mass market book trade, and we look forward to being an excellent partner in their continued expansion,” Richie said.
Up until this week, Avatar’s books were distributed through Diamond Book Distributors. BOOM! began using Simon & Schuster and HarperCollins Canada in July 2009. You can find the complete press release after the jump.
I was exchanging e-mails with Sean O’Reilly, the founder and CEO of Arcana Studio, just before Borders filed for bankruptcy, so when the other shoe dropped, I asked him to talk a bit about how it affects his business. Arcana is a small publisher, and I assumed the bankruptcy would have a big effect on them. What interests me about his response is the importance of the middleman, Diamond Book Distributors, in this case.
As always, I also wanted to talk about the different ways the company gets its books out to readers, and the relative importance of the different channels. Having spent the weekend at C2E2 talking about these different factors, I was interested to hear how they directly affect a single publisher.
Brigid: How much of your revenue comes from each channel—comics shops, bookstores, online sales, digital?
Sean: While digital is an ever-growing market to keep an eye on, that part of the industry is still in its growth phase. The majority of Arcana’s current sales come from bookstores and online – still primarily through Diamond Comics and Diamond Books, Amazon, eBay and of course you can find our product in local comic shops as well. That said, we’ve made a significant turn away from the ‘floppy’ comic market and are concentrating on the graphic novel market. Digital is the next step and we’re working with Comixology, Wowio, Graphic.ly and others.
Retailing | Struggling bookseller Borders Group, which filed for bankruptcy protection on Wednesday, told shaken publishers it’s developing a long-term plan to “reposition itself,” even as it released a list of some 200 stores set to close by the end of April. The closings include 35 locations in California and 15 in metropolitan Chicago. On a website dedicated to the reorganization, the retailer — the second-largest book chain in the United States — assures customers that “Borders’ Business Operations Continue As Normal.”
In its bankruptcy filing, the company listed $1.29 billion in debt and $1.27 billion in assets. It owes $272 million to its 30 largest unsecured creditors, including $41.1 million to Penguin Group. Diamond Book Publishers, which stopped shipping to Borders last month, is on the hook for $3.9 million. [The New York Times]
Retailing | Meanwhile, REDgroup Retail, which owns the Australian booksellers Borders (owned independently of the U.S. chain) and Angus & Robertson, has entered into administration. Angus & Robertson is the country’s largest book chain, with more than 180 stores nationwide. [The Australian, Guardian]
Retailing | Borders Group, the second-largest book chain in the United States, filed for bankruptcy protection this morning, announcing plans to close about 192 of its 639 Borders, Waldenbooks, Borders Express and Borders Outlet locations over the next several weeks. It’s unclear how many of the company’s 6,100 full-time and 11,400 part-time employees will be affected by the closings. Borders, which listed $1.29 billion in debt and $1.27 billion in assets, plans to continue to operate through the court process with the help of $505 million in financing from lenders led by G.E. Capital.
The likelihood of bankruptcy has loomed for the past several weeks as the Ann Arbor, Mich.-based bookseller pushed unsuccessfully for publishers and distributors to convert late payments into $125 million in loans. That concession was critical to Borders securing $550 million in refinancing from G.E. Capital. Publishers like Penguin Group, Hatchette, Simon & Schuster, Random House and HarperCollins are now, in Publishers Weekly‘s words, on the hook for hundreds of millions of dollars. Diamond Book Distributors, which stopped shipping to Borders last month, is owed $3.9 million. [Bloomberg, The New York Times]
Borders Group announced on Thursday it has secured $550 million in refinancing from G.E. Capital, so long as the struggling bookseller meets certain requirements — including convincing major publishers and distributors to convert late payments into $125 million in loans.
That’s a major obstacle, as publishers already seemed poised to reject the proposal, which followed an announcement in late December that the retailer would delay payments to some publishers and distributors. The news led some, such as Diamond Book Distributors, to stop shipping to Borders, the second-largest book chain in the United States.
The company had pushed for an answer on its offer by today, when January checks are supposed to go out to publishers. But according to Publishers Weekly, publishers turned down Borders’ request for another meeting earlier this week, which would suggest that acceptance is unlikely.
Borders, however, isn’t limiting its options: For the first time in public, the bookseller raised the possibility of bankruptcy.
“We view the refinancing route as the most practical, efficient and beneficial to all parties, and we are working with our vendors in this regard,” President Mike Edwards said in a statement. “At the same time, given the current environment surrounding Borders, and in order to assure that the company can pursue its efforts to position itself to properly implement its business plan, it is prudent as well for Borders to explore alternative avenues, including the possibility of an in-court restructuring.”
The struggling Borders Group on Monday laid off 40 employees from its headquarters in Ann Arbor, Mich., and an additional five from distribution centers, The Detroit News reports.
Just last week, 310 employees were told they’d lose their jobs with the closing in mid-July of the bookseller’s distribution center in LaVergne, Tenn., near Nashville. In addition, the company eliminated 15 regional management positions.
The cuts come as Borders negotiates for a $500 million credit line from GE Capital to buoy the retailer for six to 12 months while it restructures its business. The company announced on Dec. 30 that it would delay payments to some publishers and distributors, leading some — such as Diamond Book Distributors — to stop shipping to the bookstore chain, the second-largest in the United States. Those publishers have until Feb. 1 to accept or reject a proposal that would convert delayed payments into loans, which would see them take up to one-third of Borders’ reorganized debt.
The bookseller also will close nearly 200 Waldenbooks and Borders Express locations, and 17 Borders superstores, by the end of the month, moves announced before this current crunch.
Jaclyn Trop of The Detroit News has a solid look at the rise and decline of Borders that cites a lack of strong leadership and a slowness in adapting to the Internet as major reasons for the chain’s struggles.
Retailing | The Borders death watch continues, with the struggling bookstore chain giving publishers until Feb. 1 to accept or reject a proposal to convert delayed payments into loans. Publishers reportedly are skeptical of the plan, which would see them take up one-third to one-quarter of the bookseller’s reorganized debt. The Ann Arbor, Mich.-based retailer also has hired bankruptcy and restructuring lawyers to advise in its restructuring efforts, which center on negotiations to secure a $500 million credit line from GE Capital.
Borders, the second-largest book chain in the United States, announced in late December that it would delay payments to key publishers and distributors, leading some — such as Diamond Book Distributors — to stop shipping books. Jacket Copy reminds us that Borders Group is closing nearly 200 Waldebooks and Borders Express outlets before the end of the month. Additionally, it’s shuttering 17 Borders superstore locations nationwide. [The New York Times, The Wall Street Journal]
The big news this morning is that Tokyopop has signed with Diamond Comics Distributors. Just about five years ago, Tokyopop inked what was supposed to be a mega-deal with HarperCollins. In addition to taking over distribution of Tokyopop’s books, HC would partner with them to develop manga based on popular YA properties like the novels of Meg Cabot. If you have a minute (hey, long weekend going up), go refresh your memory with David Welsh’s delightfully snarky column noting that the deal was not quite as novel as it was touted to be.
Lea Hernandez also had a bit of fun with the press release, mocking Tokyopop CEO Stu Levy’s quote:
St00 Le\/y makes his usual incomprehensible pronouncement: “[the deal] would expand the manga lifestyle into mainstream youth culture, building a new paradigm in entertainment, where east meets west and a new generation of mult-ethnic creators can flourish”
My own reaction at the time was more guarded, noting that manga adaptations of graphic novels didn’t thrill me all that much, manga being a separate medium and all, and I hoped this wouldn’t lead Tokyopop away from the Japanese product.
Retailing | Executives from Borders Group reportedly told a group of publishers on Thursday that the struggling bookseller is close to securing refinancing from GE Capital and other lenders. However, one publisher remained unconvinced the plan could turn the company around. The meeting was the latest between the bookstore chain — the second-largest in the United States, after Barnes & Noble — and major book publishers that began late last month, when Borders announced it would delay payments to some publishers and distributors. That news led Diamond Book Distributors last week to suspend shipments to the retailer. Borders also confirmed on Thursday that it has eliminated 15 managerial positions: nine regional merchandising managers, four event-marketing managers and two district managers. [The New York Times]
Retailing | Diamond Comic Distributors announced it will again hold its annual Retailers Summit in conjunction with the Chicago Comic and Entertainment Expo. The event will begin on March 17 with retailing workshops, publisher focus groups and an opening-night reception, followed the next day by the keynote breakfast and platinum-sponsor presentations. [Diamond Comic Distributors]
Legal | The U.S. Supreme Court appeared divided Tuesday during oral arguments on a California law that would forbid the sale or rental of violent video games to minors. Justices Antonin Scalia, Ruth Bader Ginsberg and Sonia Sotomayor raised free-speech objections to the statute, with Ginsberg asking: “If you are supposing a category of violent materials dangerous to children, then how do you cut it off at video games? What about films? What about comic books?” Chief Justice John G. Roberts Jr. and Justices Stephen G. Breyer and Samuel A. Alito Jr. indicated their belief that the state can restrict the access of minor to video games, while Justices Anthony M. Kennedy and Elena Kagan probed the issues without showing their cards. It will probably be several months before the court hands down a decision. [Los Angeles Times, PC World]
Crime | A man charged with orchestrating the July theft of the expensive comics collection of an elderly Rochester, N.Y., man who was beaten and later died has been arrested by FBI agents for allegedly selling hundreds of thousands of dollars worth of stolen merchandise on eBay. [The Daily News]
Crime | Police in Stamford, Conn., charged Spider-Man and Captain America with assault and Poison Ivy with breach of peace following a weekend brawl in a parking garage. [The Associated Press]
Publishing | Chart-watcher John Jackson Miller wades into the grim direct-market sales figures for August, and notes that they mirror the state of the market in 2000: “Like 2010, 2000 was a year with a successful super-hero movie release — the first X-Men film. In that year, however, it had little impact on the market partially due to the cash-poor position of retailers at the time — and we might expect retailers were in the same position this year. [...] In 2000, by contrast, the reason wasn’t the general economy, but rather the seven-year industry recession that preceded it. Another similar element: price increases. From 1999 to 2000, Marvel went from benchmarks of $1.99 and $2.50 to $2.50 and $2.99. Other titles increased as well; $2.95 first became the industry’s median price in late 1999. The 2000 jumps are one of the more drastic previous increases by percentage — eclipsed, of course, by the current $2.99-to-$3.99 move.” [The Comichron]
Legal | India’s Delhi High Court has refused to hear a complaint by Archie Comics challenging the use of the name “Archies” by Mumbai-based Purple Creations. The court said it had no jurisdiction in the matter because Archie doesn’t have an office in India. [Deccan Herald]
Beginning in September, Marvel’s titles will be distributed in the book market by Hachette Book Group. Diamond Comic Distributors will continue to carry Marvel products to the direct market.
The announcement, made this morning in a press release from Hachette, ends months of speculation as to whether Marvel, now owned by Disney, would end its five-year-old agreement with Diamond Book Distributors. As Heidi MacDonald notes, many expected Marvel to sign with HarperCollins, which distributes Disney’s book divisions.
MacDonald speaks to DBD’s Kuo-yu Liang, who assures her the distributor will survive the loss of Marvel.
Read the Hachette press release after the break.