Publishing Industry Market Update; Vol. 4, Issue 3
What is Happening at Simon & Schuster?
Unless you’re new to the Update, you’ve already heard about the trend-bucking results that S&S has been having for the last couple of years. And 2022 was no exception. Sales were up 10%, topping $1.1 billion. Even better, operating income jumped 16% to $248 million. Some enviable numbers, to be sure. All this, while CEO Jonathan Karp and his moneymaking colleagues worked under the cloud of uncertainty that was the pending—now imploded—sale of the company to Penguin Random House.
Yet, Simon & Schuster parent Paramount continues to say that the publishing juggernaut isn’t core to their video-based business and still intends to sell it off. Man, if that’s a “non-core asset,” I would like to have one or two “non-core assets.” Reuters reported that a Wall Street firm is in talks with Paramount to shop S&S with the target price being between $2 billion and $2.5 billion. If PRH was willing to pay $2.2 billion two and a half years ago, you have to think S&S is worth more now. Publishers Weekly reported that Paramount would expressly NOT entertain any offers from the #2 largest publisher, HarperCollins, given the expectation that an HC offer would meet the same fate as PRH.
Maybe Paramount should think about jettisoning the film and TV business instead and hang on to the storied publisher. But they aren’t consulting the Update for some reason.
Hachette Sees Sales Climb
Thanks primarily to the September 2021 acquisition of Workman Publishing, Hachette also saw an increase over 2021 sales, with parent Lagardere Publishing posting a 5.8% increase in global revenue. Though unlike S&S, Hachette's profits fell by 14% due to inflationary pressures.
Again, what’s going on at Simon & Schuster?!
The Year of the Bookstore
Ok, maybe not. But it was a banner year for our brick-and-mortar friends. The U.S. Census Bureau report showed that bookstore sales rose 6.2% in 2022, to nearly $9 billion. That figure Trumped (sorry, couldn’t help it) the pre-pandemic total from 2019. Nice to see the reversal of what had been a pattern of decline in recent years (thanks to Amazon).
Speaking of Amazon (Don't We Always?)
It’s not going quite as well in the online sector. While Amazon’s recent struggles are not likely to be blamed on the resurgence of physical bookstores, the global e-tailer is cutting more than just its headcount. Amazon has now announced it is halting construction on phase 2 of its new second headquarters (dubbed HQ2) in northern Virginia, including the 350-foot tall centerpiece office tower referred to as “The Helix” (Google it for conceptual renderings).
Weekly Numbers
Here are the weekly results for February:
Week ended February 4, 2023: Down 2.1%
Week ended February 11, 2023: Down 8.8%
Week ended February 18, 2023: Down 0.8%
Week ended February 25, 2023: Up 0.6%
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