Lagardere reports hit to Hachette US e-book sales

Lagardere reports hit to Hachette US e-book sales

Hachette Book Group's e-book sales declined as a proportion of its overall business in the first half of 2014, and the impact of the Amazon/Hachette Book Group dispute may have contributed, Dominique D'Hinnin, co-managing partner of Lagardere SCA, has said.

In the US, net sales of e-books were down to 29% of trade net sales as against 34% at end-June 2013 in what the company called a "zero growth digital market". This compared to "sustained growth" in the UK, where e-books were 36% of net sales in adult trade, up from 31% at end-June 2013. Overall e-books formed 11.3% of Lagardere Publishing's total net sales for the first half of 2014, stable year-on-year.

D'Hinnin said the US result was "maybe" the result of what he described as "the Amazon relationship", but added that it was "hard to tell – probably a little bit, but very hard to assess." The US e-book market was also plateauing, he pointed out. Negotiations with Amazon remain ongoing and there is "no deadline".

D'Hinnin was speaking this afternoon (Thursday 31st July) as the company announced overall first half sales down 1.2% on a reported basis and 2.6% like-for-like at €3,364m. Lagardere Publishing saw net sales of €903m in the first half of 2014, down 1.5% on a reported basis and 1% down like-for-like. However the second quarter saw sales up 2.7% on a reported basis and 2.5% like-for-like at €510m (up from €498m in the first quarter).

The fall in US e-book sales - described in the report as showing a "limited impact from Amazon's punitive measures" - came despite a 5.6% rise in overall US activity, attributed to the integration of Hyperion and the takeover of Disney's distribution activity as well as good performances in General Literature, including Robert Galbraith's The Silkworm and reorders for Donna Tartt's The Goldfinch.

The UK saw activity up 1.1%, with good performances in General Literature, driven by "successful releases and momentum in e-books, as well as education." In Spain/Latin America, activity was down 6.7%, due to delays in the implementation of Spain's curricular reforms and a "sluggish economy" in Argentina. France was down 9% year-on-year on 2013, which saw publication of bestsellers including second and third volumes of the Fifty Shades trilogy and Dan Brown's Inferno.

Lagardere said its strategy was now focused on organic growth rather than further acquisitions.

Tim Hely-Hutchinson, Hachette UK c.e.o., commented: "Little, Brown acquired Constable & Robinson at the beginning of the year, Hodder & Stoughton acquired Quercus in April and we are delighted to be working with our talented new colleagues.
 
"In the first half of the year, we have had 14 number one bestsellers and a total of 78 titles on the Sunday Times published lists and our e-book sales continue to grow.  As ever, our bestsellers reflect the diversity of our publishing across all our lists – standout titles include Robert Galbraith’s The Silkworm, the paperback of Donna Tartt’s The Goldfinch, Mr. Mercedes by Stephen King, Missing You by Harlan Coben, A Perfect Heritage by Penny Vincenzi, Judy: Dog in a Million by Damien Lewis, Skin Game by Jim Butcher and Hello Hugless Douglas by David Melling and it has also been an exceptionally strong first half in our education division.
 
"At this half year stage we have created a very strong foundation for the second half of the year which includes some extraordinarily wonderful books including David Mitchell’s The Bone Clocks (Sceptre), David Nicholls’ Us (Hodder) which, together with Siri Husvedt’s The Blazing World, have just been longlisted for the Man Booker Prize, The Good Life by Martina Cole and The Sunrise by Victoria Hislop and, in non fiction, Boris Johnson on Churchill, Ranulph Fiennes on the Battle of Agincourt and The Second Half, Roy Keane’s memoir co-authored with Roddy Doyle."