All change in library supply

<p>Kevin Holden, m.d. of Holt Jackson library suppliers, arrived back from his holiday last week to news that the second of his two main competitors had been bought out by a big-muscle wholesaler. Gardners&#39; acquisition of Askews is a huge shift in the library supply market; coming in the same week that EUK got the go-ahead to merge Bertram and THE, the wholesale bookselling and library supply sector is consolidating at a rate of knots.</p><p>Holden, who now runs the last of the big general library suppliers not attached to a wholesale business, is &quot;considering his options&quot;, he says, only half joking. The competition he has fought in the past few years is about to get even tougher.</p><p>Since wholesaler Bertram and library supplier Cypher joined up in 1999, Bertram now routinely uses its trade wholesale business Bertram Books to source stock on better terms for its library customers, supplied through Bertram Library Services. The expectation now is that Gardners will do the same with Askews.</p><p>&quot;They will certainly use Gardners to purchase for Askews,&quot; says Moira Arthur, m.d. of Peters Bookselling Services, a supplier of children&#39;s books to public libraries. &quot;It doesn&#39;t make sense to buy it, if not. With Bertram, publishers were a little upset, but they haven&#39;t done anything about it. I don&#39;t think they will do anything about it.&quot;</p><p>Terry Reilly, former c.e.o. of Bertram Group, adds: &quot;I wouldn&#39;t be surprised if Askews/Gardners followed Bertrams&#39; lead.&quot;<br /><br /><strong>NBA fallout</strong></p><p>Along with Holt Jackson, Peters is one of the last remaining independent library suppliers in the UK. Arthur sees the latest acquisition as part of a market grab by the leading wholesalers. &quot;It&#39;s all about market share,&quot; she says. &quot;Wholesalers want to be the biggest and the best, and they want to do it through acquisition. To capture as much of the market as possible. The more books that go through the warehouse, the better the economies of scale. If you can be busy 24 hours you can maximise profit. It doesn&#39;t matter if it&#39;s libraries, bookshops or supermarkets.&quot; Arthur says Gardners&#39; move was &quot;surprising&mdash;but we should have seen it coming&quot;.</p><p>Reilly sees the latest round of consolidation as part of a wider thrust toward providing better value for library customers. &quot;Bertram Library Services (BLS) and Askews and others have driven up discounts, and are having to find ways of becoming more efficient,&quot; he says. Such moves began long before the Museums Libraries and Archives Council (MLA) launched its project to improve library procurement through its Better Stock, Better Libraries programme, but the two agendas are &quot;complementary&quot;, Reilly says.<br /><br /><strong>Discount up, spend down</strong></p><p>Shifts in the sector reflect economic pressures too, believes David&nbsp; Lindley, group marketing manager at Coutts Information Services, academic library supplier, and former sales and marketing director of Books for Students. &quot;Before the end of the Net Book Agreement, library discounts were about 10%,&quot; he says. &quot;Now we know that discounts on some books have reached around 45%&mdash;and suppliers continue to add value with the services they offer.&quot;</p><p>Lindley believes that competition has intensified as library suppliers have become harder to run, with suppliers taking on more servicing of stock for libraries; being required to invest more, especially in IT systems; operating at lower margins as pressure to discount mounts up; and competing for an ever-decreasing pot of money being spent in the market.</p><p>Average library discounts are now pegged at between 31% and 39%. Included in this is the cost of servicing the books by, for example, adding the individual library&#39;s stamp, a pocket on the first page to hold the issuing ticket, a plastic cover for protection, and so on. Such servicing is currently amazingly labour-intensive: BLS employs 240 people in this work at its Leeds base. By comparison, retail trade discounts, which do not include such servicing, are commonly between 40% and 46%.</p><p>Holden argues it is time for a more level playing field across channels: &quot;The better terms will ultimately come out of publishers&#39; profits, and hopefully this latest move will make them see that the old distribution channels can no longer be maintained,&quot; he says.</p><p>The most recent figures from the Chartered Institute of Public Finance and Accountancy (CIPFA) put the overall spend by UK libraries on books and pamphlets at &pound;93.8m during the year to end-March 2006. This covers reference works, adult fiction and non-fiction, and children&#39;s books (children&#39;s books are worth approximately 20%, or &pound;18.8m, of the total).</p><p>Bertram is thought to capture about a third of that overall spend, about &pound;31m, having grown its share in part by offering better discounts in the past year. Askews&#39; annual turnover is around &pound;23m; Holt Jackson about &pound;18m; while the remaining &pound;21.8m is split between Peters, and a handful of other smaller suppliers. Lindley suggests that the total library spend is down from about &pound;120m 10 years ago.</p><p>Indeed, the current wave of consolidation continues an earlier period when Cypher (renamed Bertram Library Services in 2005) amalgamated Morley Books, Greenhead Books and Library Services UK into one. Before its move on Askews, Gardners already owned Browns and some of the remnants of Books for Students, which went bust in 2005.</p><p>Kathryn Pattinson, Askews m.d., says Gardners&#39; approach came &quot;out of the blue&quot;; and that the link-up makes good sense in the current business climate. &quot;Given the current markets and the discounts people are receiving it is a perfect match for us. Gardners&#39; has such a good name in wholesale and Askews&#39; reputation in library supply is very strong. It&#39;s good for us and good for them.&quot;<br /><br /><strong>Better deals ahead?</strong></p><p>Add into the market the Better Stock, Better Libraries (BSBL) project, and library supply becomes even more changeable. BSBL&#39;s brief is to look at how the existing library supply model can be improved to provide better value to the public library sector. At present it is pursuing four different strands, Andrew Stevens, BSBL project director, says.</p><p>One aspect of the initiative is to work with Book Industry Communication (BIC) to create standards for EDI and classification categories, as well as funding BIC for an e4&shy;libraries project&mdash;similar to its e4books project&mdash;to encourage more e-commerce in the library supply market, until the end of 2008. A scoping plan for e4libraries will be completed in the next month.</p><p>Another strand is a project steered by Amanda Ridout, HarperCollins General m.d., and the PA&#39;s libraries group, working with Essex Libraries, Westminster Libraries and Wiltshire Libraries throughout 2008 to look at possible ways to streamline supply.</p><p>Also in BSBL&#39;s sights is a more open and standardised tender&nbsp; process for buying library books, which it hopes to have in place&nbsp; by 1st April 2009. Central Buying Consortium (CBC), Yorkshire Book Consortium and Greater Manchester Consortium are all looking into how they can achieve this, including asking for stock supply and servicing to be bid for separately.</p><p>CBC, the UK&#39;s largest buying consortium, which represents 17 local authorities in the Midlands and the south east, went out to tender last week with its library business for the next two years (plus another two years, possibly), starting 1st April 2008. Its current approximate spend is &pound;17m for books and &pound;2m for audiovisual materials. Both Askews and BLS are expected to bid. CBC has taken guidance from BSBL on its procurement plans: it is adopting a standard approach to stock selection, servicing standards, and EDI.</p><p>The fourth strand of BSBL is to find a strategic partner for the provision of bibliographic services for libraries (that is, placing orders, receiving items, and handling invoicing) to be shared across multiple authorities; it is currently working with 46 authorities. &quot;There are two possible routes here&mdash;what we call the &#39;public sector&#39; route and the &#39;commercial&#39; route,&quot; Stevens says. &quot;We are exploring which might be the best for libraries.&quot;</p><p>The public sector option will see a local authority or consortium handle ordering and payments on behalf of others; the commercial route would put a profit-making organisation in place to do it. A number of potential suppliers attended a briefing day in London on 12th June.</p><p>It is this final piece that is perhaps the most controversial among some library authorities and commercial library suppliers. In the library&nbsp; sector those with good procurement practices in place question the&nbsp; benefits of such an upheaval, while on the commercial side there are fears that direct relationships with libraries may be eroded.</p><p>At Peters, Arthur is wary of the BSBL project, but is taking a business-as-usual approach. &quot;We bid for business we feel we can make money on. There is no point in being busy fools.&quot; She adds that &quot;BSBL has the potential to have a huge effect on the library supply sector. Libraries are coming under threat&mdash;they&#39;re trying to run them as a business, but they&#39;re not a business, they&#39;re a service.&quot;</p><p>Holden of Holt Jackson goes even further: &quot;BSBL has set a ball rolling that it can&#39;t stop. Rearranging the library supply sector may allow libraries to get better discounts, but servicing costs will increase to make up for that and I doubt very much that libraries will be paying any less for a fully-serviced book in five years.&quot;<br /></p>