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Scholastic in consultation with staff over distribution changes

01.01.70 | Philip Jones

Scholastic is in consultation with 31 staff after it said it was in "advanced" talks about moving its trade distribution to HarperCollins.

The children's publisher has also revealed an operating loss of £7.6m for the year to 31st May 2009. This figure reflected a "deterioration in overall trading and the costs of restructuring [its] book fair operations". Sales declined to £30.3m from £37.1m, which it said reflected higher turnover relating to the movie adaptation of "The Golden Compass" in 2008.

A further 56 Scholastic Book Fair employees are facing relocation, after a second decision to move its Book Fair distribution from a rented site in Coventry to an owned facility in Southam, Warwickshire, which is 15 miles away.

The restructuring means that Scholastic will concentrate on distribution to schools from two sites, with direct fulfillment of Scholastic Education titles to schools and the teaching community moving from Southam to an owned Witney site, from where Scholastic Book Clubs already operates, and Book Fair distribution moving to Southam.

Alan Hurcombe, group managing director at Scholastic UK, said there were "significant benefits available to Scholastic and to our customers in moving distribution services to a third party business". He added: "At the same time we have undertaken a review of the activities and capacity of the rented Coventry site and concluded that it is no longer right for our business."

He said: "We believe that today's proposals will strengthen our Scholastic businesses and give them greater potential for a successful future. They are intended to improve profitability and enhance the service to our customers. They are not in any way a reflection on the efforts and commitment of those affected."

As part of a restructure and review of its balance sheet, the publisher wrote off £11.3m associated with investments, issued share capital to the company's parent for £10m and used this cash to pay down third party borrowings. It said it had reduced its interest charges by 50%.

It is not yet known whether the changes will result in any redundancies. In June the company revealed that its joint venture with The Book People was to be broken up, with Scholastic retaining the School Link book club. In August, it announced that up to nine jobs could be lost with the relocation of its education team from rented offices in Leamington Spa to offices owned by the publisher in Witney, Oxfordshire.

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