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Cost savings for Scholastic after revenues drop
21.12.12 | Benedicte Page
Scholastic Corporation has reported a 10% year-on-year drop in revenue in the second quarter, to $616.2m (£379.5m) from $685.3m in 2011 (£422.1m). The result reflects lower sales of higher margin educational products, lower than anticipated sales of The Hunger Games trilogy and lower revenue in school book clubs than 2011, the publisher said. Increased investment in e-commerce and e-book initiatives were also a factor, it added.
Chairman, president and c.e.o. Richard Robinson said that the publisher had, however, been encouraged by a "positive uplift in sales" in November in its educational technology and trade businesses and good results in school book fairs for the quarter.
Robinson said: "We are implementing cost savings initiatives and expect these actions to result in savings in the range of $20m to $30m in the remainder of this fiscal year. With our cost savings actions, strong cash position and recently amended long-term credit agreement, we have ample flexibility to continue our investments in technology-based learning products, e-books and e-commerce, as well as the continued expansion of publishing and product development in southeast Asia, to fuel long-term profitable growth."