Revenue-growing Book People hit by one-off costs

Revenue-growing Book People hit by one-off costs

The Book People sold “more books to more people than ever before” in 2012, growing revenue by 9.2%. However, the company said some “very tough” cost-saving decisions caused it to rack up a loss of £2.5m, down from a profit of £1.7m in 2011.

The Book People transferred some of its warehouse operations from Kettering to Coventry in 2012, resulting in 88 redundancies and other one-off costs. It also closed down loss-making channels The Puffin Book Club and Puffin Post, selling the brand back to Penguin, and moved its print-based magazine Red House to a specialist online store, again incurring one-off costs.

Also contributing to the loss was “heavy” investment in the company’s e-book offering” and “other digital solutions that show great promise for the future but are not yet revenue generators,” said Seni Glaister, chief executive of The Book People.

Glaister told The Bookseller: “[Last year] was a difficult year for a number of reasons, but the fact we’d like to focus on is that we sold more books to more people than ever before. Our customers were definitely feeling the pinch as they were spending less per order and opting for cheaper books, but we kept them engaged and active throughout and we’re beginning to see this pressure lift. This autumn our average order values are showing a good increase on the same period last year.”

Sales for the 12 months to end-December 2012 were £93.1m, up 9.2% on the previous year. The company extended its book range, which resulted in over £500,000 in extra turnover, a figure that is expected to increase during 2013 after customers “responded positively”. The Book People has also been trialing new revenue streams, and has developed online store capabilities for distributors to market directly to customers, which is showing “very promising signs”. Earlier this year Faber launched FaberShop on its website.

After focusing more on its e-commerce website over the past few months, and connecting more with customers through social media and direct email marketing, Glaister said The Book People aimed to be “better” than Amazon. “We are very pleased with the progress we are making online but I think we have only scratched the surface and have plenty of innovation to look forward to,” she said.

“I don’t think it is our aspiration to be bigger than Amazon but we have set our sights on being better than Amazon, and make no secret of that.” The Book People plans to achieve this by giving publishers access to data about their readers and allowing them to talk directly to targeted consumers about their books.

“We can also be better for the consumer by offering choice,” Glaister said. “This isn’t such a priority in recession but the time will come when the consumer will want to make a careful choice about who they buy books from. I think there will be great demand for other booksellers in the market—not just us, but a host of specialist booksellers too.”