Trade feels the squeeze on margins

Trade feels the squeeze on margins

A call by Foyles c.e.o. Sam Husain for more support on margin for high street booksellers has been met with silence from the major trade houses. Independent presses have expressed support, but noted their own eroded margins.

In an open letter to The Bookseller, Husain drew parallels between the bookselling industry and the plight of HMV, saying that if publishers did not act now in terms of offering more support on margin or look at consignment stock, then the two could share the same ugly fate.

Husain asked for a “level playing field” between high street and online retailers and supermarkets, whom he said receive up to 15% more discount on trade and academic titles than independent bookshops.

“We try our best to add value by making browsing and discovering books as enjoyable as possible and providing helpful and knowledgeable staff. If we are to do more, and even have ambitions to expand, then we need to finance this through improved terms from all our partners,” he said.

Peter Donaldson, owner of the Red Lion Bookshop in Colchester, endorsed Husain’s view, saying: “He has hit the nail on the head. I hope this message is heeded deeply by publishers.”

Waterstones m.d. James Daunt said publishers had got better but he questioned the approach to trade discounts. “Should they husband the bricks and mortar shops? It’s a pretty fragile ecosystem you know. Do I mind if Foyles has a bum deal compared to me? I don’t think it is very sensible in the long term but I am not going to refuse a good offer because it is not given to the Chipping Norton bookshop, but in the long term it is not that good an idea,” he said.

Hachette and Penguin declined to comment on the letter, while spokespeople from Pan Macmillan, Random House, Simon & Schuster and HarperCollins were unavailable for comment.

Candida Lacey, managing director at indie Myriad, said: “Independent publishers need booksellers like Foyles, but can we put our money where our mouth is? I’d certainly like to try but there’s no pretending it’s going to be easy . . . I don’t have a magic formula but I do know we need each other.”

Juliet Mabey, publisher at OneWorld, added: “I completely endorse the call to support bricks-and-mortar booksellers while they are still with us. The question is who should offer this support? Book publishers are facing higher paper costs and manufacturing coupled with downward pressure on cover prices, while booksellers (online and physical) ask for ever higher discounts.”

Derek Wright, director of Wordsworth Classics, noted that over the last two years, rising paper prices had lead to an increase of around 23% in printing costs.

However Andrew Franklin, m.d. of Profile, said: “The Independent Alliance was set up to help stores like Foyles and we do a good job, but that doesn’t mean we can’t do more. It’s about publishers working to a timetable to promote a nd market our books in ways which help them, and arranging author events. We are all feeling the squeeze, but we can squeeze together, hug each other close and feel the love.”

Mainstream publisher Bill Campbell said publishers had got to drive book value back up. “Pricing has got incredibly confusing with Amazon, and everything is a drive downwards,” he said. “It’s dog eat dog, and in the middle of that publishers are trying to reinforce the value of a printed book.”

Editor's blog: Margin matters