Publishing Industry Market Update; Vol. 2, Issue 12
In Pursuit of Simon & Schuster’s Big Numbers
Last month, the Market Update reported in-depth on the Justice Department’s lawsuit to stop the acquisition of Simon & Schuster by industry behemoth Penguin Random House – a move the DoJ claimed would leave one entity in control of two-thirds of the market for acquiring new books. The next highest bidder for the Viacom subsidiary opined on the oversized PRH offer for S&S, saying there was “clearly no market logic to a bid that size – only anti-market logic.”
Well, he may have spoken too soon. S&S is having a huge year, which just might end up justifying that oversized bid—or at least making a colorable argument. While the regulators have spent months mulling over the legality of the proposed deal, CEO Jonathan Karp and his team at S&S have been doing their darndest to grow into that massive valuation. Q3 of 2021 was up 15% in sales and a whopping 66% in profits from the same period last year.
Maybe Viacom will start siding with the DoJ in the hopes that the deal gets quashed, and they get this now-shinier asset back. Of course, with all this success, it only makes the prospect of a combined PRH/S&S a bigger gorilla than it would have been based on last year’s figures. If the regulators object to a giant merger that swallows two-thirds of the market, they certainly aren’t going to like that combination after S&S has gorged itself on a revenue feast in 2021.
Coming Soon to a Bookstore Near You…Profits?
The brick-and-mortar retail segment continues to rally back from the devastating effects of the COVID shutdowns. Bookstore sales jumped 42.1% in September compared to September 2020. Through the first 3 quarters of 2021, bookstores have outpaced 2020 by 38.6%. Those rosy results are even more impressive when compared to the entire retail segment which saw gains of 14.7% and 20.2% over 2020 for September and the first 9 months, respectively.
Now, if we could just unclog the supply chain….
Weekly Book Sales Rebound
Print book sales are quickly erasing the memory of the late-summer slowdown. Sales have seen 4 straight weeks of gains of at least 7% over the comparable periods in 2020, and double-digit increases for the last three weeks. The week ending October 23 came in 7% higher (remember that week was still going up against the final days of a presidential election selling spike), followed by a 12% jump for the week of October 30. The week ending November 6 saw a massive 17.3% spike, followed by a very un-Wimpy 11.7% increase for the week ending November 13 (a subtle shoutout to Jeff Kinney’s latest release that moved 112,000 copies during that reporting period).
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