The Bookseller.com

28th August 2008

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Bertelsmann continues China exit

07.07.08 Philip Jones

German media group Bertelsmann has confirmed that it is to close it Chinese book clubs but has denied that it is retreating from the market

Bertelsmann said the decision was reached following a change in business strategy and follows a comprehensive strategic review and considerable efforts over many years. Two weeks earlier, the group announced it would close 36 stores of the 21st Century Book Chain in 18 cities in China.

According to Interfax, the review concluded that both bookstore chains and its book club business in China have been affected greatly by the fast changing market conditions and that the group was convinced that neither business had the potential to grow in a sustainable manner.

Despite the closures, the company denied it was exiting from China. "We see the two businesses failing to maintain their fast development and size in the long term amid a rapidly changing market," Bertelsmann said in a statement. "But we will continue to focus on other fast developing businesses in China, one of the three most important markets that will drive Bertelsmann's global business."

Analysts attributed the failure of its book clubs to the rise of online bookstores which took a big bite of the profits of the traditional bricks- and-mortar bookstores.

Meanwhile, according to Reuters, Bertelsmann is drawing up plans for the sale of its DirectGroup France division for an amount that could exceed €300m.

Interfax

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