Bonnier’s interim chief exec seeks ‘sustainable future’

Bonnier’s interim chief exec seeks ‘sustainable future’

Bonnier Publishing’s acting chief executive has told The Bookseller he is working on a "new strategy" to ensure the company has a "sustainable future", after it emerged that the firm has been beset by profitability issues in recent years. 

Jim Zetterlund was speaking after being parachuted into the role from his position as chief operating and financial officer at Bonnier Books, a division of Bonnier Publishing’s parent company in Sweden, on Friday (23rd February), following the abrupt departure of c.e.o. Richard Johnson.

No reason was given for Johnson’s swift exit, with little fanfare, after nine years at the helm, but news emerged shortly afterwards that Bonnier Publishing had "wrestled with profitability problems" in 2017 "as the result of rapid growth", which had "a strong negative effect" on the financial results of its parent. Bonnier Books’ profit nearly halved last year, falling from £37.3m in 2016 to £20.3m, despite revenues rising.

Speaking exclusively to The Bookseller, Zetterlund admitted that rapid expansion had led to Bonnier Publishing’s cost base outgrowing the revenue it made in the past two years. "It does need to be said, 2016 was not a great year for the business and, in all honesty, neither was 2017 from a strictly financial perspective, although the company has made impressive strides in other ways," he said. "The explanation for this is simple: our cost base has been outgrowing our rise in revenues which, together with considerable investments in rights, has deprived cashflow."

Richard Johnson speaking at FutureBook 2017

Zetterlund’s first task is to create a new plan for the UK business to ensure its sustainable future. "Our focus right now is firmly on the future and creating a new strategy that will help us to build a sustainable, long-term future," he said, adding: "It’s an honour to step into this role as group acting c.e.o. and to be working with Sharon [Parker, group chief operating officer], Julian [Shaw, group commercial director], Perminder [Mann, UK c.e.o.] and Jon [Perdoni, UK chief operating officer] to plan the next phase of Bonnier Publishing’s journey."

Under Johnson, Bonnier Publishing expanded rapidly, acquiring companies such as Igloo Books, Totally Entwined and John Blake, while launching new businesses such as Blink Publishing, Hot Key Books and Bonnier Zaffre. Since 2009, sales had grown to £128m, but in 2016 UK accounts showed that its main divisions were loss-making. Bonnier also ruffled feathers by making a number of big-money, high-profile author poaches from rival companies, including Wilbur Smith, who moved from HarperCollins to Bonnier Publishing in an eight-figure eight-book deal last year, following in the footsteps of Lynda La Plante, who joined from Simon & Schuster a year earlier. It also acquired various rights to publish the Disney brand in the autumn of 2017.

While too early to disclose specific turnaround plans, Zetterlund said the firm now intended to focus on fiction and narrative non-fiction, aligning the UK publisher more with the output of its other European book divisions, adding it was "now time" for the company to become a "fully-fledged publisher", having grown from a small portfolio of imprints into a "major player in the UK publishing industry".

Some literary agents The Bookseller spoke to expressed concern over publishing contracts they had signed for authors whose books have not yet been published. "My agency has a number of books at Bonnier. We are very worried about the whole situation and clarification is urgent,” one agent said, who spoke on condition of anonymity, adding that a handful of advances were paid late by the firm.

However, Perminder Mann (pictured below), Bonnier Publishing’s UK c.e.o., moved to calm jitters about the future of author contracts and said that while the firm hoped to grow its literary fiction and narrative non-fiction arm, it would not be retreating from the mass market. "Absolutely we will be honouring all the contracts we have signed, and we will be signing more," she said. "We are on that growth trajectory and we are not done yet. We have a lot more to achieve. We are committed to all of our stakeholders and we will be honouring every single deal."

When asked whether the company will grow its literary fiction arm through acquisition of other businesses or through acquiring new authors, she said: "We haven’t agreed yet on how we will do it, but we will be looking at all avenues. We have always wanted to align ourselves with our parent company one day and now that day has come. It is natural that [literary fiction] is now the area we will focus on."

Johnson’s background was as an accountant in corporate finance. He helped Bonnier buy Autumn Publishing in 1999 and was later "asked to hold the fort for six months" while it "found someone who knew something about publishing", he told The Bookseller in an interview in 2015. "After a few months it became apparent that the businesses needed a lot of restructuring and I was the right person for that," he said at the time.

Known as an unconventional and controversial figure behind Bonnier Publishing’s aggressive expansion, Johnson keynoted The Bookseller’s FutureBook Conference in December, where he blasted the industry’s "obsession with targets and quotas" around diversity, instead championing publishing as an industry "for everyone", while arguing that the mass market should not be a "dirty word" in the book trade.

Many in the industry said they were unsurprised by his departure, pointing to the perils of growing quickly while splashing out large sums on author brands which could not be quickly recouped. "At Bonnier they are working at a furious pace and that sometimes compromises their publishing and communications," one agent said, speaking anonymously.

While praising the children’s divisions as being "wonderful, fantastic, creative", Caroline Michel, c.e.o. of PFD, added: "You can throw a lot of money at books but if it is not what the public wants, it is not going to work." However, on Zetterlund’s appointment, she added: "Bonnier [Books] has such a reputation across the world. We are encouraged and hope that it will be a successful business in the UK market as well. We only want it to succeed."