Parragon is closing down in the UK because of competition and a lack of retail space, owner DC Thomson has told The Bookseller.
DC Thomson said it decided to exit the books market, where Parragon specialises in licensed titles, because the channels Parragon publishes into are “hugely” competitive and retail space is increasingly challenged. These problems are a factor in its businesses worldwide, not just in the UK, it added.
“Parragon has been loss-making for some time and part of the new management team’s focus was to stem the losses with a view to moving it into profit,” the company said. “Despite significant progress by the team… the decision has been taken by DC Thomson, having explored all options, that it cannot continue to be the long term owners of Parragon. We will wait for the outcome of the consultation process and will engage with all employees throughout this period.
"We are exploring alternative options for parts or all of the business and we will use the consultation process to update on any changes these may deliver."
Altogether 140 jobs at risk in the UK and 245 globally. The publisher will start a 45-day consultation process on 7th March for Parragon’s UK business and will retain any licences until that process is complete.
In the US, DC Thomson will continue to liaise with employees, but in Australia, selective assets of Parragon Publishing have already been transferred to Lake Press. This transaction will be completed within 21 days.
The news about Parragon’s closure was announced on Tuesday (27th February), when c.e.o. Mike Symons said: “Early last year, the new management team joined and undertook a strategic review of the company, implementing some immediate changes which improved the company position.
“Under their guidance, the whole team made really significant progress over and above the expectations of the shareholders, but the market has gone against us further than anticipated.”
David Thomson, director of DC Thomson, said: “Whilst we are still open to offers and expressions of interest for the business, DC Thomson is unable to run this process indefinitely. Therefore, the company has made the decision to enter into a consultation process. This decision has not been entered into lightly and, as owners of the business for more than a decade, we are very disappointed to be making this announcement.
“No other parts of the DC Thomson group are affected by this and DC Thomson is fully committed to supporting Parragon throughout this process.”
Parragon sold £8.7m in the UK last year through Nielsen BookScan, down 12.2% on 2016 (£9.6m) and 15.6% down on 2015 (£10.2m)